Always Run the Report!

I admit that I used to make a serious mistake that would put a lot of what I had at risk. I used to not do credit checks. Now after doing them for several years, I will NEVER accept a tenant without first seeing their credit report. The potential resident’s credit report has so much information about them that you are not seeing when you don’t run a credit report. It’s not just a question of whether they have good credit or not.

You can see WHO they are paying and not paying and what is causing the credit to be bad. As you probably know from a landlord’s perspective, all creditors are not as critical as others. You can see past addresses that you may not see otherwise on the application. You can compare recent payment history, judgments, older payment history, and if the credit problems are recent ones on the credit report.

On a credit report you can see if the social security number even matches the applicant. You can get a glimpse of the type of lifestyle payment choices that affect the applicant’s debt and how much debt they may have. This may be hidden from you otherwise–and so much more.

There are many times that I have been extremely thankful and relieved that I ran a credit check on an applicant. I probably would have accepted the applicant as a resident had I just gone with other free information that was available to me.
All I can say folks, is I hope the best for those of you who continue to play Russian roulette with your rentals. But honestly, for less than ten bucks (the cost of a credit report), it really does not make sense that you are taking the extra risk of not seeing a credit report before accepting any applicant.

You all know as well as I do that it only takes one wrong selection of a resident and that can cost you thousands if not tens of thousands of dollars. And yet some of you don’t think it’s worth the ten dollars to run a credit report. Come on. When I used to not run a credit report it was because I was naive and simply didn’t know better or it was because credit reports were not as easily accessible as they are now. The excuse that says that because your competition is not doing them means you don’t have to is NO excuse. Even if you don’t want to charge the applicant, still run the credit report.

Because of competition, at times I often run a “Special” – No Application Fee This Week! It’s not that qualified applicants care that you run a credit report. They simply (in some areas) may not want to pay a fee. So don’t charge them the fee…. But I’ll say it again, RUN the report. YOU are the one with so much potential to lose and all because you’re too cheap to run a ten dollar credit report. Friends, this is another classic example of landlords being too frugal for their own good. Don’t make the serious mistake I used to make. Always run the report!
– Jeffrey Taylor, Founder of MrLandlord.com