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How important is a Credit Check when Renting

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Real Estate Agent with HomeStarr Realty RS143922A

 

How important is a Credit Check when trying to rent a property . I have a rental in a beautiful condo community . It amazes me how many times I have shown this property .The prospective tenant loves the property and immediately say's "I Will Take It ". Then I explain there is a fee for a credit check and criminal background check They then inform they are not sure how their credit is and have no objection on proceeding.

I am confused when I have received the credit checkshow important is a credit check back. They are horrid simply horrid . The prospective tenants must have an idea about their credit . How can you not know that you had an eviction a few years back or that your revolving credit card is in collection .

I understand that in today's economy people are have troubles;but you must know that you are having problems with your credit . It costs the prospective tenant money to have these credit checks done .Why waste your money and time if you know you are behind in payments , have judgments and collection accounts.

How do some landlords rent to tenants without running a credit check ? How important is a credit report ? What has been your experience in this situation with credit reports when renting ?

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Hannah Williams is known throughout Philadelphia as HelpfulHannah – and if you’ve spent more than five minutes with her, you know exactly why. She’s an expert at anticipating people’s needs, she has a real feel for real estate, and she’s an accomplished problem-solver.

Hannah has been helping people buy and sell homes all over Philadelphia since 1984. Many of her clients purchased their first, second and even third homes with her expert help, and Hannah wouldn’t have it any other way.

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Show All Comments
Mitchell J Hall
Manhattan, NY
Lic Associate RE Broker - Manhattan & Brooklyn

Hi Hannah, Congrats on the feature. We do thorough credit checks and income verification. It is always best to be honest and up front about past issues rather than letting the landlord (or coop board) discover it first. When negative history is discovered without an explanation it is an automatic rejection.

Jan 31, 2012 12:02 AM
Richard and Jean Murphy
Harborview Properties - Portland, ME
(207) 712-4796

Hannah, Credit checks are done when people buy insurance, cars, homes... You get better rates when you have better credit. This is the way of the world in 2012. If you are renting a property you own you better do the credit check. You are renting a property worth presumably $150,000, $250,000 and up and really want a responsible person to live there.

Jan 31, 2012 12:19 AM
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Hannah, in this day and age a credit check is a must for landlords peace of mind. Checking on references is also a must.

Jan 31, 2012 12:45 AM
Michelle Francis
Tim Francis Realty LLC - Atlanta, GA
Realtor, Buckhead Atlanta Homes for Sale & Lease

Hannah, 

Credit reports and the whole rental application are ABSOLUTELY CRITICAL for landlords and property managers.  We handle high end homes and in 10 years have no evictions as well as have collected every dime of rent due.  Our first most important task is finding a well qualified tenant.   Since there is a high demand and not enough good rental homes - we are seeing a high average in credit scores - like 768.  This  blows the assumption that the folks can't buy, they can.  These tenants are choosing not to!

Run the credit reports - or set yourself up for torture - collecting rent and handling evictions.

All the best, Michelle

Jan 31, 2012 12:50 AM
Bryan Robertson
Los Altos, CA

I do a lot of rentals and a credit check is required for every one.  I don't mind if the tenant brings their own report but it's always required.  As for scores, anything under 750 becomes an issue.  Any tenant under 700 has absolutely no chance of getting the property.

Jan 31, 2012 01:40 AM
Hannah Williams
HomeStarr Realty - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-820-3376

Cindy one of the first questions I ask is how is your credit ?  when they reply they don't know.. i ask if they are paying their bills on time . They reply yes .Then you run their credit and it is anything but what they said Makes me wonder why they would spend the money

HelpfulHannah

Jan 31, 2012 02:40 AM
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Just about everyone inquiring for rentals confesses up front that they have a problem. So that is no surprise to me. I have managed to accumulate a fine ear over the years and just by listening and asking questions, I find out all I need to know. The other day I got a call and the story was too pat. When challenged, it became redundant...The person weeded themselves out...I showed them the door. End of story

Jan 31, 2012 02:46 AM
Patricia Aulson
BERKSHIRE HATHAWAY HOME SERVICES Verani Realty NH Real Estate - Exeter, NH
Realtor - Portsmouth NH Homes-Hampton NH Homes

Your credit is criticla and so important in life.   Always pay  your bills on time my mother always said to be growihg up and boy she was so right. 

 

 Patricia Aulson  Seacoast NH Realtor

Jan 31, 2012 02:48 AM
Hannah Williams
HomeStarr Realty - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-820-3376

Lou   You hit the nail on the head

Ed   You too have hit the nail on the head . If you know you have issues discuss them .They do show up on the credit report . Especially evictions

Laurie   I am so glad this post has been featured. With the economy the way it is there are more people renting , it is important for us as agents to be diligent in performing simple tasks as running a credit check on prospective clients . it is vital and will save everyone problems later .

Cal  yes there are some things that can be overlooked ;but must be considered . Health care bills are sometimes forgiven as are short sales as long as there is  good credit out weighing the bad . I would not want to say it is fine and then have the landlord run into problems later ..They must be aware and carefully considered

Thank you for your wonderful input

HelpfulHannah

Jan 31, 2012 02:52 AM
Hannah Williams
HomeStarr Realty - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-820-3376

Joan  I totally agree

Richie  Good for you . After awhile you do get a feel for people . If they tell me upfront they have big problems then there is no sence in doing a check ;but if they are clueless of the outcome I will accept their application .

Mike .. I am not sure I agree with you..I think you know if you have paid your bills on time .

Danny .. Extra money will work in some cases but sometimes not be worth it . Eviction cost money and aggravation . Does the ends justfy the means?

Great points here for discussion

Thank you

HelpfulHannah

 

 

Jan 31, 2012 03:02 AM
Hannah Williams
HomeStarr Realty - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-820-3376

Jane   The credit check I run also includes criminal background checks .They are very detailed . I would look at their own credit report ;but they would still have to use ours. As for extra money down that has come back to bite me later .Co signer with good credit may be an option

Sherry  I always ask upfront ..There is a difference between not perfect credit and bad credit .

Ron .. I think you are right and I like your style

Gabe .. I tend to agree with you and Ron 's comment

Thank you so much for your input

HelpfulHannah

 

Jan 31, 2012 03:12 AM
Hannah Williams
HomeStarr Realty - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-820-3376

Ginny  You are screening and have found a good solution . My question is what happens after the year ?

Marc How right you are !

Mitchell  My question is "why run your credit and spend the money without being honest" ? It always comes out Especially if there are multiple  collection accounts and also an eviction in your credit history  .What a waste of money

Richard and Jean ..  I could not agree more . I think no matter what the value of the home you want a good tenant .

Mike   I agree all things must be considered

Thank you for all your valued comments

HelpfulHannah

Jan 31, 2012 03:23 AM
Carie Shapiro
North Shore Suburbs & Chicago Real Estate - Evanston, IL

Recently, I have heard stories about landlords taking a full year's rent in lieu of a horrid credit report.  Apparently, the potential renters stockpile their money by not making mortgage payments for awhile and after foreclosure, they have a bunch of money to pay rent in full as a compliment to their disasterous credit report.  Obviously, this wouldn't work in areas that have laws regarding limits on the amount of allowable rents paid in advance.  And, I guess it also depends on how motivated the landlord is to rent the unit.  Nevertheless, this scenario was definitely new to me!

Jan 31, 2012 03:25 AM
Hannah Williams
HomeStarr Realty - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-820-3376

Michelle  My hat is off to you ! You have a fiduciary obligation to inform the landlord of any perspective tenant with unusually bad credit or criminal history . I tend to agree that in the end you will find yourself in eviction courts if you do not screen properly

Bryan .. Our credit reports are scored differently for rentals. If you are not concidered a good tenant it generates a rejection letter .

Patricia  Mother knows best

 

Thank you for sharing your thoughts with me

HelpfulHannah

Jan 31, 2012 03:30 AM
Hannah Williams
HomeStarr Realty - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-820-3376

Carie   Yes I have had people say upfront they would do this . I would leave it up to the landlord. My concern is what happens after the year is up . Do they revert to their old ways .Can they now find it in their budget after a year  to start paying rent ?

Great food for thought

HelpfulHannah

Jan 31, 2012 03:36 AM
Leslie Prest
Leslie Prest, Prest Realty, Sales and Rentals in Payson, AZ - Payson, AZ
Owner, Assoc. Broker, Prest Realty, Payson,

We don't base our acceptance of tenants on their credit. They may have awful credit but still pay their rent and be a good enough tenant. WE do a background ckeck, a criminal check and we weigh those heavily. Enough income, good rental and job history, and no legal problems.

Jan 31, 2012 04:13 AM
Hannah Williams
HomeStarr Realty - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-820-3376

Leslie   Yes but when the credit check spits out a rejection letter  It is time to stand up and take notice .

Thanks for your input

HelpfulHannah

Jan 31, 2012 04:39 AM
Mitchell J Hall
Manhattan, NY
Lic Associate RE Broker - Manhattan & Brooklyn

Hannah, Most landlords here don't allow tenants paying a year up front because then they may get stuck with a bad tenant for a year. A tenant can cause other problems besides not paying the rent. Instead there should be a separate security deposit. 3-6 months security. It should never be used toward the rent. 

Jan 31, 2012 03:45 PM
Hannah Williams
HomeStarr Realty - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-820-3376

Mitchell  I agree 100% ..You are a very wise man

HelpfulHannah

Feb 01, 2012 03:04 AM
Hannah Williams
HomeStarr Realty - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-820-3376

Corrine  I hear you loud and clear !! I don't understand it either.. I just don't understand landlords that do not run credit reports .

thank you and have a Great Day

Feb 18, 2012 04:35 AM
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