Setting Up Your Tenant Screening Criteria

Your criteria can be based upon information from the application, tenant screening reports received through an outside service such as Clearscreening.com, or information received from reference contacts given to you by the applicant. The following is a list of possible elements to consider when creating your criteria:

• Rental Reference – Was your applicant a good tenant for a previous landlord? Were rent payments made on time? How long was the lease for and did your applicant fulfill the agreement with the previous landlord?
• Employment Information/Reference – Does your applicant show a steady work history? Does your applicant show enough income to afford the agreed upon rent amount, other outstanding bills (which you’ll be able to see on a credit report), payments for utilities, and other miscellaneous expenses?
• No Credit – Some applicants will not have credit, and may not have a file with the credit bureau. For these applicants, you’ll need to rely upon your other criteria to guide your decision. You may also choose to have special policies for applicants with no credit, such as asking for a greater deposit, a cosigner, or declining their application altogether.
• Late Payments – Does your applicant’s credit report show a pattern of late payments? If so, how long ago were these late payments, and have they since been able to catch back up? Does your applicant currently have an amount past due?
• Collections – Does your applicant have unpaid collections? Are any of them from apartment communities or other residential properties? Utilities? Note: Medical Collections are often not considered during the tenant screening process because of the possibility of insurance disputes.
• Foreclosures – Does the applicant show any foreclosures? How long ago did the foreclosure happen?
• Bankruptcies – Does the applicant have any Bankruptcies on their record? Which Chapter did they file? When was the case discharged/dismissed (Has it been finalized?)?
• Credit Score – Does the applicant’s credit score fall in an acceptable range?
• Evictions – Does the applicant’s credit report show any judgments from a rental property? Does his/her Evictions Report show any filed Forcible Detainer/Entry records?
• Criminal Record – Note: Check state and local laws for information regarding what offenses can be used as grounds for denying a rental application.

Once you have selected the reports you are going to use, you must be consistent and run the same reports on every applicant to stay compliant with Fair Housing Act regulations. Use the information from the reports, application, and any references in conjunction with your criteria to make an informed, unbiased decision on your applicant.

A good policy is to put a written copy of your criteria in with your rental application. This allows each prospective tenant to see what you’ll be looking for and may help weed out unqualified applicants and save you time and energy. You may also want to keep copies on hand to give out in case there are any questions when an applicant is not approved.