Home Credit Card GuideCredit Report Credit Report Check

Credit Report Check

By: EconomyWatch Date: 25 August 2009

About The Author

The core Content Team our economy, industry, investing and personal finance reference articles.

A credit report check is vital for both prospective landlords and prospective tenants to ensure that they are getting the best bargain from the rent agreement. A credit report check helps in establishing the relevant security deposit and rent amount as per the credit risk of the prospective tenant.

Credit Report Check for Landlords

Real estate is a valuable investment and, therefore, a landlord must perform a thorough credit report check of the applicants to ensure that their property is passed onto the right hands. The tenant screening process generally consists of the following steps:

Completing a written application form. Generally, the applicant is required to furnish their Social Security number at this stage. This is necessary to acquire the applicant’s credit reports from the bureaus.
Getting the applicant's permission for credit check. This can be included as a clause in the written application, or furnished as a separate form. It is vital to acquire the applicant’s signature to authorize the credit report check.
Requesting reimbursements. Acquiring credit reports may be expensive, especially if there are a large number of applicants involved. Consequently, landlords may request the applicant to cover the expense of the credit report check.

In case an application is denied on the basis of the credit report check, the landlord is entitled under the Fair Housing Laws to send a Denial Notice to the applicant. Furthermore, the Fair Credit Reporting Act requires landlords to give a written notification to the denied applicant, containing the terms of the denial in brief.

In addition to a credit report check, landlords can also request for ‘eviction reports’ of the applicants. These help to examine whether an applicant has outstanding rent and has been sued by previous landlord(s) for non-payment.

Credit Report Check for Tenants

An applicant (tenant) should also perform a credit report check to ensure that it contains accurate information. If the report is flawed, s/he must immediately contact the concerned bureaus to get it rectified. Doing so could result in a massive improvement in the credit report and thus provide a favorable picture to prospective landlords.

In case an applicant is denied, the tenant is entitled to request a copy of the credit report within 60 days. On receiving this credit report, the applicant has the right to furnish a 100-word statement with respect to the disputed information.

Moreover, if a landlord rejects an application based on the credit status, the applicant can approach a friend or a family member to cosign the renting agreement. This co-signer is responsible for payment of rent in case the tenant defaults.