By 
It seems an uneasy task to let an apartment, especially if it is wanted among potential tenants. You have to run a check of credit history on the lodgers before you make a final decision. But to do this, you have to prepare some documents and fill out some forms. It is not going to be easy as it is like you have to find the gems.
Why Should the Tenant Have a Credit History?
In Canada, each citizen who plans to buy housing must have a credit score. The period when a person can build it is around 2 years. For foreigners, it is best to apply for a credit card as fast as possible. They can simply get a loan with no credit check. Banks will constantly monitor how often you use the card. It is preferable not to spend over 70% of your limit or think that a holder has financial troubles affecting their score. Also, if a borrower pays past due dates, the number of their credit points will be low very soon.
For a great history, the number should be around 750. Poor scores will be only 579 and less. To understand how good credit history is, a person has to apply for a bank. In the balance sheet, they will see letters and numbers. If there is 1, then the score is really great. Other numbers mean that a holder missed some payments. Letters stand for the type of loan. So if the balance indicates O1 – meaning the score is excellent. If we substitute the number for 0 – it will show us that a cardholder has not yet started using credit.
What Should You Ask a Potential Tenant?
To make sure that your future lodger is perfect for you, ask him or her to fulfill a rental application where they indicate:
- Social Security or any other ID number;
- Full name;
- Date of Birth;
- Current employer and landlord.
You would need to perform a further checking procedure. Then do not be afraid to get permission from candidates to run a credit check. Remember that you are choosing a tenant as much as they are picking a landlord.
Landlord Verification and Pricing
From your side, you have to prove that you are an actual landlord. Prepare some documentation for that:
- ID card data or a driving license.
- Proof of residence (mortgage statement).
- Documents confirming the ownership of the rental property.
Now you can look through some popular companies where you may start your credit check. Today it is possible to apply to:
- Experian;
- TransUnion;
- Equifax.
Test them and see what will work best for you. The first thing you have to pay attention to is the cost of a fee. It may vary from $36 to $75 per applicant. It is going to be as easy as house plant identification by leaf shape. You can decide who should pay it. Divide the cost between you and the tenant or charge him or her full price.
Does the Checking Take Long?
Before you see the information about each of the potential tenants, you have to get approval for it. Usually, you wait from 2 to 10 days. When you finally acquire it, apply for a credit score, and it will be ready within an hour.
Ready Report
Some renters could be forethoughtful and might offer you to have a look at a ready credit report. The question here is should you accept it or rather make a new one?
Be very attentive to the area where you let a place for rent. It might be obligatory here to take the existing report. Look at the date, and you can accept the document if it was issued less than 30 days ago.
How to Read the Report?
When you receive a credit score of an intended lodger, focus on some important details and numbers.
#1 Personal data. Start from the first page and see the person’s private information like:
1. Marital status.
2. Email address and phone number.
There are many databases and official web resources where you may check if the renter is not related to any crimes and has no fines and debts.
#2 Financial summary. Look through it and get a bigger picture of all the payments made on time, information about the card utilization, payment delays, and the total sum of the loan.
#3 Account summary. If a potential tenant’s credit history is not very long, a landlord has all the power to reject the candidate. That is why you need to see how long an account functions and what the amount of credit is.
#4 Other inquiries. Here you might find a list of organizations that already asked for the credit statement of the person. They divide into hard and soft ones. The first type influences a score, and the second one does not. If you noticed that the previous landlord asked for it too often, maybe you should think about it before letting a place?
Social Media
Today you can obtain all the viable information online without any monitoring agencies. Visit the pages of candidates on social networks. You will be surprised how much new data you know. Thus you might understand how they live, who their friends are and how they spend their free time.
Choosing an Applicant
Before you make a choice consider all the steps that a candidate with a bad credit took to improve it. Call the employer and find out the salary rate or try to speak with the prior landlord. The final step here would be signing an agreement with a renter. Remember:
“It is always best to have everything signed and in writing to protect yourself.”
Little Statistics
According to certain data, we now may see how people can gain their points following their age. It means that by 33 years old, your score should be exceptional if you paid on time and never went beyond the credit amount. Such a renter would be an ideal candidate for any house owner. Always ask for a credit check to protect yourself from criminals and fraudsters.
Comments