What is a Background Check?
In essence, a background check is a process for verifying a person's identity and confirming certain details from their past. This can be done for a variety of reasons, but it is most common among employers, renters, universities, and credit institutions. There are a fe w different kinds of background checks, so let's take a look at some of the background checks that are most relevant to landlords and renters:
Types of Background Checks
Criminal Background Check
A criminal background check examines whether or not an individual has engaged in criminal activity in the past, or if they are currently involved in any pending criminal cases. No matter how long ago a crime was committed, a criminal background check will provide a detailed report of the events, charges, and sentencing results. Excluding special cases where an individual has had certain activities expunged from the official records through the court system, any crime, large or small, is visible with a criminal background check. This kind of background check draws from all of the following sources:
- Criminal databases (federal, state, and local records)
- Sex offender registries
- Terrorist watch lists
So, why would a landlord or other renter need to know about a tenant's criminal background? While certain misdemeanors and traffic violations may not be of any interest to you, more serious crimes can affect your willingness to rent to the offending person. For example, if a potential tenant has a history of trespassing or theft, you may not want to put your other tenants at risk of becoming victims of future crimes. Similarly, if someone has been convicted of sexual assault, you might be concerned that they could become a repeat offender as a tenant in your building.
Criminal background checks also help protect your rights as a renter. If an individual has been convicted of fraud, embezzlement, or similar financial crimes, you could receive checks that bounce or rent money that has come from illegal business dealings. Also consider if a tenant has a history of drug possession or trafficking. Under these circumstances, you may be opening the door to drug dealing in your building or apartment. As a property owner, this can put the value of your property at risk and potentially bring more crime to your area.
Fingerprint Background Checks
Law enforcement agencies and other federal entities have collected over 35 million fingerprints since the Automated Fingerprint Identification System (AFIS) began in 1999. A fingerprint background check collects fingerprints from an individual and runs them through the system to see if they match any criminal activity. This kind of test is most often done in conjunction with another form of background check, and is common among employers and academic institutions. However, it can be pretty useful for renters, too.
While this may seem excessive, a fingerprint background check can catch some information that a criminal background check might miss. For example, if an individual has committed crimes using an alias, their fingerprints might be stored in the AFIS. It is virtually impossible to fake fingerprints, so this adds an extra layer of security to your background check. It is also useful for determining the citizenship status of future tenants, because everyone who goes through the U.S. immigration system is required to submit fingerprints samples.
International Background Check
If your rental property is in a large city, there is a good chance that you will have tenants from all over the world. However, it can sometimes be difficult to determine if a tenant is legally permitted to reside in the United States. While legal immigration status is a topic of contentious debate, no renter wants to be accused of harboring illegal aliens. This is where an international background check can be extremely useful.
An international background check finds information related to criminal history, education, and employment verification in other countries. For green card holders or even U.S. citizens who have lived abroad, regular background checks cannot always gather information regarding their past outside of the United States. Though it does take some extra paperwork, an international background check is vital for tenants who have spent an extended period of time abroad.
Credit Background Check
Most of us have had at least one credit background check done in our lives. Whenever you want to apply for a loan or open up a new credit card account, the pertinent financial institution will run a credit background check, often referred to as a "credit check" or "credit report," to make sure that you are in good financial standing and do not have any blemishes on your record. This is determined using a few different metrics:
If you have any debt, there is a record of it somewhere. Most people in the United States carry debt in one form or another; an outstanding balance on your credit card, a car loan, student loans, or a mortgage are all common examples. In a credit report, your income, savings, and investments are all part of your "credit." This number is set against the amount of debt you have, and this helps determine your credit score. High credit and low debt generally means you will have a good score, while low credit and high debt will result in a bad score.
For those that always pay their bills on time, this metric can help raise your credit score. However, if you consistently miss payments, this can have a negative impact.
This metric shows if you have declared bankruptcy in the past. Though it is not applicable to most people, this is a very important measure of your financial stability.
Whenever you apply for a loan, credit card, or mortgage, the financial institution pulls information to compile your credit report. Each time this occurs, there is a record of a credit inquiry. While not all credit inquiries will affect your score, a high number of hard inquiries will have a negative impact.
Credit background checks are extremely important for landlords and renters. In order to determine a tenant's financial history and ability to make payments on time, the best and most efficient way to confirm their credit history is through a background check. For example, if a person has a history of making late payments, or allowing debts to go into collections, you know that they would be a high-risk tenant and unreliable whenever rent is due.
While there are several other kinds of background checks, these are the ones that would be most useful to a landlord or renter. It is vitally important to know about a tenant's financial history, work history, citizenship status, and criminal background before allowing them to live in your building or apartment. So, now that you have an idea of the different options at your disposal and what they can show you, let's take a look at the background check process.
How to Do a Background Check
As stated previously, CheckPeople is more than happy to provide useful information related to getting background checks done, but we do NOT condone illegal activities. We are unable to provide tenant background checks, as this would be in direct violation of the Fair Credit and Reporting Act. However, we can point you in the right direction. Read on to see the best way to do a tenant background check.
Different background checks will have different processes and requirements, but here is a step-by-step guide for each kind of background check you could run:
How to Do a Criminal Background Check
Before running a criminal background check for anyone, you will need to get consent from the individual. This is an FCRA rule, so it cannot be avoided. You must give them written notice of your intention to run a criminal background check, and this must include the reason why you are running the check. After they have read and signed this document, you may proceed to the next step.
Collect the Information
In order to run a criminal background check on someone, you will need certain identifying information. The following information must be obtained:
- Full name (first, middle, and last)
- Social security number
- Date of birth
- Any known aliases
- Current address and any past addresses
- Driver's license or passport number
Choose a Method
There are essentially two ways to get a background check done; you can either contact your local courthouse/police station and request a background check, or you can find a service online. In either case, you will be required to fill out a form with your information, the information of the individual for which you want to do a criminal background check, and the reason for the background check. The process generally costs between $25-$50, and you will receive the results in 1 to 2 weeks.
How to Do a Fingerprint Background Check
While this step is important for just about any kind of background check, it is vital when conducting a fingerprint background check. You will need your tenant to agree to the procedure, which involves scanning their fingers at a special kiosk or, using the old method, having their inked fingers pressed against cards to later be scanned into the fingerprint database.
Collect the Information
While information is not really necessary for a fingerprint scan, generally fingerprint checks are used in conjunction with another type of background check. This is because the scope of information provided by fingerprint scans can be limited, so it is best to combine fingerprint checks with other methods.
Choose a Method
When choosing where to conduct your fingerprint background check, you essentially have two choices: a fingerprint company or local police station. Many companies offer fingerprint kiosks around the country, but your choice may depend on the tenant's availability and location. For both methods, the cost is generally around $50. As the landlord or renter, you will generally be expected to pay this fee for the tenant.
Conduct the Test
Since fingerprint background checks require the tenant to undergo a certain procedure, you must coordinate with them to obtain consent, arrange a time and place to conduct the test, and ensure that all fees are paid.
How to Do an International Background Check
International background checks are a complex process, with steps that can vary depending on the laws and regulations of other countries. However, there are a few ways that you can piece together international background checks from different sources.
Do the Research
Due to the complexities of the process, an international background check is not as straightforward as other kinds of background checks. To begin, you can verify much of a tenant's work, education, and criminal history on your own. You can call or email companies and educational institutions that the tenant has listed. You can also contact the proper authorities in individual countries to check their criminal history and driving records.
Consult a Private Investigator
If you are not satisfied with the results of your own research, consider hiring a private investigator who specializes in obtaining information from outside the United States. Though expensive, this can help provide you with a thorough breakdown of a tenant's past life abroad.
Credit Background Check
In order to run a credit background check on a tenant, you must have their consent in writing. Most landlords or renters include this as part of their standard contract. However, if your contract does not explicitly include signed permission to run credit checks, you will need to make a separate document.
Collect the Information
At the very least, you will need to get the following information from the tenant to run a credit check:
- Full legal name
- Current address, and any past addresses within the last 2 years
- Social security number
- Date of birth
- Current employer
- Current landlord (if applicable)
Choose a Method
There are many companies that will run a credit background check for you, and most will provide the same results. However, the cost may vary, so it may be in your best interest to shop around. These can range from $20-$50. You might also consider charging the tenant for the cost of the credit check. More often than not, tenants with poor credit will decline to pay, saving you the extra hassle.
Verify Your Identity
Most credit background check companies will want to verify that you are a landlord/renter before running a credit check on your tenant. You will need to provide the following information:
- Proof of address
- Proof of rental ownership
The Best Way to Do a Tenant Background Check
So, you've seen the different kinds of checks at your disposal and how to accomplish each one, but which one is the best? The answer is that using a combination of several different options is the best way to do a tenant background check. For the simplest, cheapest and most straightforward process that will still yield comprehensive results, combine a criminal background check with a credit background check. Together, these will confirm whether a tenant has a criminal history and if they are likely to pay their rent on time.
Fingerprint background checks add an extra layer of security, but they take more time and often don't provide results that are drastically different than a criminal background check. If a tenant has spent years living or working abroad, an international background check might be helpful, but the process can be long, arduous, and expensive. Therefore, the combination of a criminal and credit background check is the best option for most landlords and renters.
There you have it! This is the best way to do a tenant background check; but remember, you CANNOT do a tenant background check through CheckPeople, so you will need to do this elsewhere. For more info on the Do's and Don'ts of CheckPeople, consult this link. Though CheckPeople does not allow these type of searches, you can still use our services to get lots of valuable info!