According to a recently conducted study in Dubai, about 80% of landlords reported that credit checks are the biggest deal-breakers when it comes to accepting a tenant or not. With the increase in the number of cases at the Dubai RDSC (Rental Dispute Settlement Center), landlords in Dubai are under even more pressure to only accept tenants with excellent credit. It’s imperative that you run a tenant credit report before signing any contracts.
Credit reports screen people for their financial history. You’ll discover if your potential tenant has a financially stable history. Credit reports are invaluable tools for landlords.
First, you must receive written permission from your prospective tenant to go forward with a credit check. The information provided includes:
When reviewing a tenant’s rental application, a credit check is not the only metric to consider. Yet, no matter how clean their background information appears, a credit report is critical. In the end, you need to ensure that you’ll get paid.
Here are some common reasons why a landlord should always run a tenant credit report:
Perhaps the most obvious reason why a landlord would go fishing for info about a potential tenant is to establish if they have a firm financial foundation. In our day to day conversations, we always sweep matters salaries under the carpet. But when it comes to the rental business, this is absolutely important.
As the landlord, ensure that the person isn’t plagued with habitual disregard to deadlines on his other obligations. And yes just in case you didn’t know, the same could be replicated when it comes to payment.
Another important reason why you should run a tenant credit report is to confirm their identity. With the increasing technological advancements, everything is virtually possible including an identity thief. Cases of impersonation are on the rise where people use names of strangers or family member to escape the firm grip of credit check. As a landlord, ensure that the application information matches the credit report and that the dates are in consonance with everything.
Unfortunately, in life, past mistakes have the uncanny of catching up with us. Fortunately, such information can help you catch a dishonest applicant who may choose to conveniently omit such information on the application. When you discover they had been forcefully evicted a decade before yet they didn’t disclose such info, they aren’t honest.
Having a healthy credit score is like a kid having a new pair of shoes. It’s the most important thing in life at that moment and will do anything to keep them new. It would be lackadaisical for someone with an excellent credit score to mess it up. As a landlord, you can leverage that to ensure that they pay on time as timely payment will always be their priority.
Bankruptcies, previous evictions, repossession, and even collection accounts can spell trouble for you as the landlord when it comes to the tenant’s capability to pay rent on time. Unless such occasions were warranted by illness or job loss, it’s better to turn down such a tenant. Especially if an issue recently happened.
If the tenant has an excellent credit rating, then you can decide to go ahead with the screening process. However, as earlier indicated, credit checks shouldn’t be the only parameter to use to determine their capability to pay on time. Never accept anyone into your rental apartment without having paid the security deposit. No matter how beautiful their credit score is.
If the prospective tenant has appalling credit, don’t summarily reject their application. It may be worth your time to find out why. Occasionally, credit reports are prone to minor errors which the tenant may not be aware of. In addition, it’s possible they had debt from time as a student which has affected their overall credit. They may be making an excellent income at the time of the tenancy and thus may be an ok option for renting after all.
No matter how solid a prospective tenant appears on the surface, it’s critical for any landlord to run a tenant credit report. It may not necessarily be the easiest and fastest process, however, it could save you a trip to the RDSC.
At Blueground, we handle all aspects of screening tenants. If you work with Blueground, we act as your overall tenant and handle all aspects of the screening process on an individual basis. It’s an excellent option to consider, and you’ll never miss a month of rent due to poor finances!