How to Do a Credit Check on Prospective Tenants?

Overview:

It is certainly a risk to rent or lease your property these days. People make false promises when they take the place on rent, but fail to abide by the same at the time of paying rent. Hence, it is crucial for the landlord to do a credit check on prospective tenants.

Landlords can reduce the likelihood of such things, by checking the credit report of the prospective tenants. One’s credit report is a good indicator whether he/she will be able to pay you or not. A credit report will say it all whether the prospective tenant has ever declared bankruptcy, has a history of late payments, etc. Based on all this, you can decide whether to give your property on lease or not for credit check.

Instructions:

  • Check if the applicant has his recent CIBIL report. If he does not have then ask him to get one. In case, he does not then order one on behalf of the applicant and let him know the fees for the same.
  • After you get the report, inspect it thoroughly. Look for late payment history, delinquencies, etc. This will give a rough idea about the background of the prospective tenant.
  • Inform the tenant about your decision based on the credit report. Reject the prospective tenant if there is a consecutive history of late payments and bad debts. The one having so in his report might put you in trouble later in the future, as well.
  • In case, the applicant refers any mistake in the report then help him with the name of the creditor who provided false information to the bureau. This will help the applicant rectify the same.
  • If an error in the report gets rectified, and you feel that the applicant will not give you trouble in the future then you can let out your property to him.

It’s always better to play safe rather than landing into problems in the future.

Updated: November 30, 2016 — 2:54 pm

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