Feature
by Kathy Parsons
A property manager’s most difficult job is finding qualified applicants who meet your screening criteria, and identifying those who don’t qualify. From your first contact with a potential resident on the telephone, to meeting them in person, your actions and words have the potential for everything from happy tenants to costly lawsuits.
Sometimes in the rush to sign up a new resident, proper screening is overlooked, which can cost you money and many aggravating hours. Before you begin, establish your nondiscriminatory screening criteria. Your criteria should include credit requirements, income standards, references and occupancy guidelines. Most applicants appreciate knowing the screening criteria requirements up front; that way they do not waste their time applying for housing for which they are not qualified.
Many property managers and owners use a screening checklist. With a standardized checklist, every applicant receives identical treatment and no one has an unfair advantage in securing housing.
Each person 18 years or older that will occupy the rental unit should complete and sign a rental application. Their signatures on the rental applications are needed to authorize credit checks. The inquiry you generate stays on their credit reports for two years, so be sure you have their applications and signatures before ordering the tenant screening report; otherwise, they could dispute your access. Keep the signed rental applications in a secure location, including the applicants you decline.
Once you have the completed and signed application, it is time to order the comprehensive tenant screening report from SFAA’s service provider, Credit Bureau Associates, where I serve as the president. The first thing you want to do after you receive the report (which can take only minutes from the time you order it) is match the data received with the information on the rental application the prospective tenant provided. Be sure to question any information that does not match and ask for clarification from the applicant. If addresses do not follow in historical date sequence, this could be a concern for you because they may not be telling you where they lived most recently. CBA will assist you in reviewing the file more closely and our staff will be glad to review any questions you may have about the data we provide.
Remember, if you get a “thin file” with limited information or a “no record” response, CBA staff can order a social security search and make sure you have the correct name, spelling and social security number. If the prospective tenant is trying to hide bad credit, she may try to create a different social security number and variation of her name so you do not get the true credit report. If you feel the person has established credit and the prospective tenant states that she has credit accounts, then you should never get a no record response. The social security administration updates the three national credit bureaus with new data every two weeks, which includes the range of numbers just issued and any numbers that are deceased. As a property manager or landlord, this information can be very helpful and will appear as a warning on the CBA-generated credit report, which is another benefit of working with us.
The next step is to match tenants’ incomes against the pay stubs or sources of income they provided and verify their rental and employment references. Remember, all notes resulting from your verification calls should be clipped to the rental application. Do not write on the application. The notes should be nondiscriminatory and state only the facts received. Ask references specific questions and ask former landlords and property managers if they would rent to this applicant again.
When you order a tenant screening report from CBA, you will receive (at no additional charge) fraud warnings and risk scores to assist in your tenant screening decision. Many property managers and owners will use the risk score as part of their screening criteria. The range for the scores is 300 to 825; the lower the score, the higher the credit risk. An average cut-off score is 625, but credit grantors/property managers must decide for themselves what the risk level should be and then treat each applicant the same.
Along with basic credit reports and eviction searches, CBA provides many different types of screening services for you to access. We provide bad-check-writer reports, criminal background searches, social security verifications and business credit reports. Feel free to contact any of our knowledgeable staff to discuss the different types of reports we can provide to SFAA members.
Many members have already signed up for our online services, which provide easy access and quick delivery of tenant screening information. This is a great tool for landlords and property managers to get reports on weekends and evenings. Once you have been set up with an access code and password, the reports can be accessed online (24 hours a day, 7 days a week) at no additional cost. If you run into a problem, we also have after-hours technical support to assist you. Technical support can be reached after hours by calling 800-564-6440 and choosing option 6. Your call will be forwarded to a technician, who will be paged and return your call within 15 minutes.
Even if you read your reports carefully and select an applicant that you find trustworthy, keep in mind that sometimes even the best tenant may run into bad times and have trouble keeping their monthly obligations. CBA’s collection department offers special rates to SFAA members and can recover the dollars you thought were lost. We front all the legal fees to collect your money judgments or your open accounts that did not become a judgment yet. It is simple and easy to assign an account to CBA for collections.
Our professional collection staff will work on your accounts using cutting edge technology to try to locate and collect from consumers that owe you money. We electronically report collection accounts to all three national credit-reporting agencies. Remember, we offer special rates to SFAA members and we charge no fees up front. If we do not make a recovery, then you owe us nothing.
The information above is a good start to organizing your screening procedures and finding great tenants, which can save you time, money and hours of frustration. For a more in-depth look at the credit screening process, please attend our SFAA seminar at Fort Mason on August 30 at 6 p.m. Visit www.cbacredit.com for more information.
The opinions expressed in this article are those of the author and do not necessarily reflect the viewpoint of SFAA or the San Francisco Apartment Magazine. Kathy Parsons is president of Credit Bureau Associates. She has been in the credit reporting and collection business for over 30 years and teaches tenant screening classes for the California Apartment Association. Kathy is the past president of the Fairfield-Suisun Chamber of Commerce and serves on the advisory board of the local CAA chapter. She can be reached by calling 1-800-564-6440 x 103. © 2006 by the San Francisco Apartment Magazine. All rights reserved.