Tenant screening isn't showing the true picture, what to do?

Question

I'm new to BP, and new to focused renting and REI. However I'm decades into both residential and commercial rentals. Up until recently, it has been a sideline or ancillary to my normal business.

We have some residential properties that are co-located on our personal residence (large property). Traditionally we've rented them to known people, family and friends. The screening process was informal at best.

In 2018 we decided to publicly list one of our properties for rent in anticipation of beginning to purchase some additional REI for long term hold and rent. We had a good response and one of the candidates (a couple) passed the initial interview well enough.

We utilized TransUnions Smart Move product to conduct the screening and the couple came back with a low credit score, but it was based on the complete lack of credit information. Basically someone who had lived a cash life, or so it seemed. The little bit there had plenty of age on it but there was almost no credit file. Having worked in credit in the past, I've seen files like this. Uncommon but not unheard of. Some people just don't trust credit and don't want any. Everything else checked out with no problems. Criminal, background, etc. All squeaky clean. According to TransUnion, I should have rented the property to these people and I had green lights on the summary report.

Because this is our personal property (read, our kids are here) we called in a favor for an additional screening through a source that I won't name, but safe to say it is more able to get the real story. The answer from that person was 10 pages of criminal background. Nothing felonious or dangerous, but PLENTY that told us to run screaming and a good bit that should have shown up on the TransUnion report. As best we could tell, the people were scam artists and had taken on a false identify. Nothing in the Transunion product hinted at anything wrong. Maybe calling references would have picked up on this, but references can be faked much easier than a credit file.

We told the people to go away, and they were quite pushy trying to get us to take them. Obviously we sent them packing and moved another applicant into the property who passed his background check.

My question is, did I find the bad needle in the haystack and this was a one in a million occurrence or are the publicly available background check tools effectively useless? I have little faith in what I am seeing as they are all pulling from similar data. I'm moving over to Cozy as we speak, and they offer a background check as part of their process. But I have no reason to expect that their check will be better than the TransUnion check.

What are others experience on the validity of background checks? Have you seen false identities in your checks? Can I trust Cozy for a proper background check? What steps are you taking besides the background check and calling references?

Karl B. · Answer

I get a background check (credit and criminal) and make certain I get a copy of a driver's license of all adults on the lease. I also look at the PA docket list (most of my properties are in PA) to make certain nothing was omitted on the criminal background check.

I also check their social media - it's amazing how much you can see about a person. Half the applicants I look up either have illegal drug use mentioned on their page or talk about how broke they are.

Do your best to leave no stone unturned.

Kimberly H. · Answer

I have used three different background screening companies and they have all missed stuff I can find searching public court records myself.

Dan Moore · Answer

Thanks. We didn't have a hard and fast credit score criteria on this particular rental but we obviously will going forward.

Dan Moore · Answer

Thanks for the tip. I agree, it is amazing what people will put out there.

My best Facebook moment was when it tried to make a "year in review" of my Facebook page (I'd logged in for some random reason). It gave an error and said I didn't have enough content to create the video. Good, that is how much information I want Facebook to have on me.

Dan Moore · Answer

That is the information that I need. It isn't just me. So sure, get a background check but assume all the good stuff is still buried somewhere. Hence Facebook, calling the employer, getting picture IDs, etc.

Thank you

Dennis M. · Answer

Half .. no Karl , your being generous . id say three quarters lol another reason I like immigrants in my Erie apartments

Dennis M. · Answer

@Karl B.

I do the exact same thing

Dan Moore · Answer

Thank you Eric. I am indeed in NC, and the criminal violations were also occurring in NC.

Jim Adrian · Answer

I use tenantbackgroundsearch.com and it has worked pretty good.  But you need to check out social media, google people and call previous landlords etc.   I have used mylife.com but its only clues.  Sometimes you have to go with your gut instinct.  As for credit score,  I don't rely on set number but more importantly patterns that show up on the credit report.  People are renting for a reason.

Eric Worral · Answer

@Dan Moore this is a great question.

The issue is that some states are moving away from "instantaneous access" for background checks and we've noticed this trend developing in North Carolina (I'm assuming that's where your rental is located).

Currently, automated services cannot access criminal data in Massachusetts, Wyoming, South Dakota, Delaware, and Colorado. This includes SmartMove reports.So unless the screening service performs the background check by hand-compiling the reports you will not see criminal data in those areas because the automated-software can't access the data.

We offer SmartMove and a RentPrep hand-compiled background check option. What we've found is we have to manually check the criminal records in North Carolina the same way we do for Colorado using records we find in Dexter (one of our data providers).

Tenant screening isn't showing the true picture, what to do?

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