There is no "standard" background check/credit report etc. There are a number of different apps and websites others have discussed on these forums that each provide their own aggregate of information. The amount and types of info varies. More importantly is how you interpret and USE that information. For example, some sites simply provide a "rental score" or some such number, which is completely abstract in relation to other possible sources. These are very different from what used to actually be pretty standard, a FICO score. Even this FICO score only relates to one element...their credit; you still need to conduct background and income verification and research.
I review as much info as I can dig up and see if it all fits; or if there are unexplained gaps or omissions from their application; do former addresses (and names!) fit the info provided and mesh properly? What does the information reveal about their habits...Good or Bad? Typically, bad habits in one area will point to bad habits in other areas of their life. Court records can be relevant to determining how well rules are followed or what types of activities/people they spend time with. Multiple addresses often point to job hopping...which came first, and why? Financial bad habits of course warn you of potential future issues, depending on type, frequency, and how long ago. Collection items, especially recent consumer type, are a big red flag. Medical bills, foreclosures, not so much as long as they did not run up their credit cards at the same time, or since. google and other sites turn up interesting info at times, but you need to be sure it is your subject.
Another factor that I am convinced improves my odds is the fact I am always very upfront with prospective Tenants, at showings, in response to emails/phone calls, and in person when we ALL sit down to review and sign the Rental Agreement. I make it clear from the beginning we have certain expectations of all residents. These might vary from one property to another, but overall are very consistent in terms of payments, due dates, communications, occupancy, house rules (if any), maintenance, Tenant responsibilities, and more. I am equally clear when there are "problems" with a property...parking issues, angry pit bull next door, close proximity to neighbors/noise issues, inadequate electrical service for multiple kitchen appliances, no trampolines allowed, etc. etc.
I take the time to review, page by page, the Rental Agreement and all addenda. NOT word by word, but page by page, clarifying each paragraph that is important to me. Tenant responsibilities, payment due dates and allowable methods, late charges, the "joint and several" clause, adding/removing someone from the Agreement, yard maintenance expectations (which are also spelled out in the Agreement), vehicle requirements, etc. etc.
By the time we reach the point of signing, they know full well we are operating a Business, and expect them to meet the terms of the Agreement they are signing. Anytime during this process they ask a question that could be a warning signal, I take the time to play out the scenario so they understand this is not my first rodeo. Once in a great while they will stop and change their mind mid-signing, but not often. I usually scare them off before that point if they are less than honest and sincere. In the end, sometimes they do reach a point where they need to get out early. I have earned their respect by being responsive to routine issues that arise, and fully informing them at the outset, so they ask what I can do. Easy, as long as they remove their personal property and rubbish, clean properly, and turn their keys in asap, I will pro-rate their rent to their last day of occupancy. This is far cheaper for our Owner than going to court and fighting to get them out, especially with local laws.
By just sending out some multipage document for a digital signature, and providing access for showings via lockbox or someone with no skin in the game, the plain fact is NO ONE is reading the documents, much less getting any idea what is/is not important to you or how various issues would be addressed. Sure, you have a signature to show the Judge. Problem is, you have to show the Judge! Lots of time and money involved with that. Do I spend maybe an hour to hour and a half personally showing a prospect and processing their application? Yes, but that makes the next several years much easier than if I did not.
When asked what my criteria is by a prospect, I reply with "approximately 2.5 times the rent for total household verifiable income, and we run a credit and background check to verify all information." If they ask "what credit score do you require?" I do not make decisions based on the score alone, I look at the total situation, and will advise them of that fact. If they are borderline, I will request specific additional documentation or option of co-signer which would also need to pass screening. I ALWAYS promptly send an Adverse Action Letter when I do deny someone, and I also NEVER allow for renegotiating, or providing more information or co-signers at that point.
