Choosing a Tenant Screening Company

Choosing a tenant screening company has significant impact on business operations. The screening company’s professionalism, business experience, references, products, pricing, delivery, and legal compliances must be evaluated to determine if the business relationship will provide the service the landlord requires for his business needs and his legal compliances.

A landlord must be confident in this tenant screening partnership to ensure receipt of accurate applicant consumer data required for qualification of an applicant to the landlord’s rental standards and potential offer of tenancy.

There are Fair Credit Reporting Act (FCRA) requirements and procedures for tenant screening providers. Tenant background checks are considered consumer reports under the FCRA if they are used to help decide eligibility for housing and include information that has bearing on a consumer creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living. Landlords and tenant screening companies are subject to FCRA compliance. The provider is required to follow reasonable procedures to ensure accuracy, require certifications from their clients, and provide clients with information about the FCRA.

Landlord due diligence in evaluating and selecting his tenant screening company is a core business function. There are known issues with incorrect or incomplete posting of public records information in many jurisdictions which can result in erroneous information on tenant background checks. Without accurate, complete, and timely consumer information, the landlord is at risk of installing an unqualified tenant with potential rent default and property damage. The information returned by the screening provider is only as good as the provider’s quality assurance of compliant policies and procedures in compiling tenant background checks. While the screening company furnishes the consumer reports, the final decision for acceptance or rejection of the applicant is the landlord’s decision.

It may be beneficial for a landlord to prepare a checklist of the important criteria to evaluate potential tenant screening companies. The checklist can be used to analyze the products, pricing, and screening process that each company uses to provide tenant screening reports.

The following list is representative of important considerations that could be used in evaluating a screening provider’s qualifications.

  • Knowledge of applicable current federal, state, and laws regarding the use of tenant screenings for the jurisdiction of the rental property location. Some states and cities regulate the use of credit reports and criminal background checks for tenant screenings. A landlord should confirm the company’s policies and procedures for review and update of legislative actions to ensure current compliances.
  • FCRA compliant. A landlord should inquire how the company operates under FCRA requirements. An important question to ask the provider is how the adverse action process is handled. An adverse action notice is required by FCRA if the landlord chooses not to rent to an applicant based upon the content of a background check.
  • Quality assurance that report data is accurate, verifiable and current. Providers should be able to furnish information regarding how their system matches rental applicant records to corresponding data with appropriate filters in place to identify and remove duplicative data and minimize errors of false reporting. Providers should be able to provide information on what databases are used for public records and how often the database information is refreshed.
  • Utilize current technology measures to ensure data security and safeguarding of sensitive information to prevent data theft, and data fraud. What are the quality control procedures?
  • Offer a wide range of screening products, e.g., credit reports and background reports. If the product line is too specialized, a landlord would need to have multiple screening providers to obtain all necessary screenings for his applicant. Having to interface with multiple providers and different collection and delivery methods can present challenges in analysis and evaluation of reports or the reports could contain conflicting or confusing information requiring further investigation and verification. Make sure the company can provide the types of reports needed for applicant screening before committing to a service agreement.
  • Transparent in their product pricing and customization options. Providers should post clear understandable pricing structures to define price points for affordability and flexibility for landlord productivity and cost efficiencies. A la carte pricing can be attractive to landlords that need only basic services. Package pricing of the most utilized screenings can offer a more comprehensive screening report yet at a lesser cost than purchasing several products separately. A landlord should ask about the billing process, e.g., does the landlord or applicant pay screening costs.
  • User friendly in their process for data entry on multiple platforms. The screening company should have an easy and simple online ordering process for  tenant screening reports. If the order process is difficult to understand or to use, a landlord will hesitate to use the service or possibly avoid screening altogether. This is detrimental to the landlord’s business operations.
  • Provide clear, understandable information for products, pricing, and process. Instructions should be provided for guidance on data entry, data retrieval or delivery of processed data. Frequently asked questions should be posted on the website and direct access to trained service staff for help with problems with reports, billing questions, or other assistance should be readily available. If the screening process is cumbersome or difficult to understand and complete, a landlord should consider another provider. A landlord should request a copy of sample reports as a preview of what the landlord could expect if he engages the services of the provider.
  • Process orders in a timely manner. Delays in processing or long intervals before reports are returned can cause a landlord to lose a good prospective tenant. Time is of the essence in screening and selection to fill a vacancy.
  • Customer service focus. Customer support is all important to a busy landlord. A major complaint against screening providers is not being able to reach a representative to ask questions or resolve a problem. Real, live personal contact with a trained friendly customer service rep is valuable in itself and is a primary consideration in selecting a provider. If the provider offers flexible hours of customer service, the greater the chance that the provider will get the landlord’s business. Applicants do not just apply during regular business hours. Landlords want a provider that can help them qualify an applicant nights, weekends, or holidays. Client reviews and ratings may provide insight on real time response to landlord questions and help in resolving problems.
  • Provide a sample service agreement for landlord review and discussion. Contract language should be clear, understandable, detailing agreement terms, conditions, and default remedies, including pricing, policies, and services provided.

It is a landlord’s responsibility to operate his business in compliance with applicable federal, state, and local laws. In choosing a tenant screening company, a landlord must ensure that the provider operates in a likewise compliant manner that respects the rights of consumers to privacy and security of personal identifying information. Which service company is best for a landlord’s rental operations requires landlord analysis and evaluation of critical elements in the decision making process and how best the screening company fulfills this business necessity.

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