StarPoint Tenant Screening

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Turning a tenant applicant down because of their credit report information? Know your legal obligations!

The FCRA requires you as the potential property manager/landlord to give an adverse action notice to each consumer whose credit report was used to deny their lease application. The consumer is also then entitled by the law to a free copy of their credit report.

What is an adverse action notice?

An adverse action notice informs an applicant that they have been denied credit, employment, insurance, or other benefits based on information in a credit report. The notice should indicate which credit reporting agency was used, and how to contact them.

All consumers are entitled to a free copy of their credit report if:

  1. They were denied or were notified of an adverse action related to credit, employment, insurance, a government license, or other government granted benefit within the last 60 days and a credit report was used in the decision process.
  2. They were denied a house or apartment rental or were required to pay a higher deposit than normally required within the last 60 days and a credit report was used in the decision process
  3. They certify that they are unemployed and intend to apply for employment within the next 60 days.
  4. They certify that they are a recipient of public welfare assistance.
  5. They certify that they have reason to believe their credit report contains inaccurate information due to fraud.

StarPoint Tenant Screening gives you the ability to print adverse action notices with each credit report. The notices allow the property manager/landlord to check off the reason for the denial. The letter also informs the consumer that they can contact StarPoint for a free copy of their credit report.

TransUnion Credit Report Codes

ECOA (Equal Credit Opportunity Act) Inquiry and Account Designators
A – Authorized user of shared account
C – Joint contractual liability
I – Individual account for sole use of customer
M – Account for which subject is liable, but co-signer has liability if the maker defaults
P – Participant in shared account which cannot be distinguished as C or A
S – Account for which subject is co-signer and becomes liable if maker defaults
T – Relationship with account terminated
U – Undesignated
X – Deceased

Type of Account

O – Open Account (30, 60 or 90 days)
R – Revolving or Option
I – Installment
M -Mortgage
C -Check credit (line of credit)

Date Indicators
A -Automated
C – Closed
D – Declined
F – Repossessed/Written Off/Collection
I – Indirect
M – Manually Frozen
N – No Record
P – Paid Out
R – Reported
S – Slow Answering
T -Temporarily Frozen
V – Verified
X – No Reply

MOP Current Manner of Payment
00 – Not rated, too new to rate, or approve but not used
01 – Pays as agreed
02 – 30–59 days past the due date
03 – 60–89 days past the due date
04 – 90–119 days past the due date
05 – 120 days or more past the due date
07 – Paying or paid under Wage Earner Plan or similar arrangement
08 – Repossession
8A – Voluntary repossession
8D – Legal repossession
8P – Paying or paid account with MOP 08
8R – Repossession; redeemed
09 – Charged off to bad debt
9B – Collection account
9P – Paying or paid account with MOP 09 or 9B
UC – Unclassified
UR – Unrated

KOB Kind of Business Classifications
A -Automotive
B – Banks and S&L
C – Clothing
D – Department, Variety and Other Retail
E – Employment
F – Finance, Personal
G – Groceries
H – Home Furnishings
I – Insurance
J – Jewelry, Cameras and Computers
K – Contractors
L – Lumber, Building Material, Hardware
M – Medical and Related Health
N – Credit Card and Travel/Entertainment
Companies
O – Oil Companies
P – Personal Services Other Than Medical
Q – Finance Companies, Other Than Personal Finance Companies
R – Real Estate and Public Accommodations
S – Sporting Goods
T – Farm and Garden Supplies
U – Utilities and Fuel
V – Government
W – Wholesale
X – Advertising
Y – Collection
Z – Miscellaneous

Information provided by TransUnion  June, 2011

Reasons for Renters Insurance

Renters insurance, like homeowner insurance, is sold as a package. Renters insurance provides coverage for your personal belongings and personal liability (legal responsibility) in the same way that a homeowner policy does. However, rental policies do not provide coverage for the value of the building you rent, so the premium for tenant coverage is low.

Reasons for Renters Insurance: Typically, the homeowner’s policy that covers the building you live in does NOT offer any protection for your property, your cost to find other housing, or your personal liability. If you rent an apartment or a home, you will not always be required to have renter insurance by the lease, but without it you are often left out in the cold if the building is damaged or you are a victim of theft. Renters insurance will also cover you if someone is injured in your home or elsewhere due to your negligence.

Renters Insurance for College Living:

  • If you live on-campus: Check and see if your belongings are covered under your parent’s homeowners policy. If a student is a dependent under their parent’s insurance coverage, their personal belongings may be covered in the event of a covered loss.
  • If you live off-campus: Consider purchasing renters insurance. Renters insurance will provide coverage if your property is destroyed or stolen, or if someone is injured on your rental property due to your negligence. If you are dependent on your parents’ insurance, check with their agent or insurance company to see if the coverage extends to a dependent living away at school.

Multiple Roommates: Renters insurance usually covers you or any relative you live with. If you live with non-relative roommates, each of you would need your own renters insurance policy to cover personal belongings and personal liabilities. Check your insurance policy contract or talk to your agent or insurance company for more details.

Selecting an insurer for renters insurance

Coverage and costs vary greatly by company. It’s important to shop when choosing an insurance company. Comparison shopping takes a little more time, but it can save you money!

  • The key to comparison shopping is knowing what coverage you need and then getting premium estimates (rate quotes) from a number of insurers. Each policy should provide the same amount of protection for your home, its personal contents, liability protection, and medical payment coverage. If you want full replacement-value protection on your house and personal items, make sure this coverage is included in all policies you consider.
  • Renters insurance companies use one of three methods to sell their products.
    • Independent agents represent several companies and can give you several quotes.
    • Exclusive agents only sell the products of one insurance company.
    • Direct market sales are over the Internet or by mail or telephone.

    You can find insurance companies and agents through the phone book, on the Internet and television and by asking friends and neighbors.

  • Have the agent explain the exclusions and limitations in the contract and quote options for perils like flood and earthquake that are not covered under the standard policy.
  • Cost is just one factor to consider when choosing an insurance company. It’s also important to look at the company’s financial condition and how it treats its policyholders. A company’s financial information is available from the agent that represents the company.
  • It’s illegal for unlicensed insurers or agents to sell insurance. Business cards aren’t proof that an agent is licensed. If you do business with an unlicensed agent or company, it might not pay your claims or refund your premiums if you cancel your policy. If an unlicensed agent or company contacts you, check with your state insurance department immediately, so it can investigate. Your actions may protect someone else from being victimized.

Questions you should ask the agent

  • Are the agent and the insurance company licensed by my state insurance department? For how long?
  • How can I find out the claims history of the home before I buy it?
  • If I submit a claim, how will it affect my premium when I renew the policy?
  • What discounts are available?
  • What does the policy cover? What doesn’t it cover? What are the limits to the coverages?
  • How much coverage for my personal property do I need?
  • Should I buy flood insurance or earthquake coverage?
  • How will my credit history affect my premium?
  • Underwriting standards

Underwriting standards are rules insurance companies use to decide whether to insure your property. A company may decline your application for coverage if your property does not meet its underwriting standards. Each company has its own underwriting requirements, but typical ones include:

  • Age, condition, and square footage of your home
  • Property upkeep and maintenance
  • Type of construction (brick, frame, stucco, etc.)
  • Exterior lighting or security systems
  • Home value and proximity to fire protection

Natural Disasters and Tenant’s Rights

When natural disasters strike affecting the condition of your rental properties, know your tenant’s rights:

  • If the premises are damaged or destroyed other than by the wrongful or negligent acts of the tenant so that the enjoyment of the premises is substantially impaired, the tenant may terminate the rental agreement and immediately vacate the premises. The tenant may vacate the part of the premises rendered unusable by the casualty, in which case the tenant’s liability for rent shall be reduced by the fair rental value of that part of the premises damaged or destroyed.
  • When the tenant moves out, the landlord must either return their deposit (plus interest, if applicable) within 15 days of termination of the lease if the landlord does not intend to impose a claim upon the security deposit; or justify in writing by certified mail, to the tenant’s last known mailing address within 30 days upon termination of a lease, as to why they are keeping a portion of, or all of the deposit. If the notice is not sent as required within the 30 day period, the landlord forfeits his/her right to impose a claim upon the deposit, unless the tenant fails to give proper notice prior to vacating.   If the tenant objects to the claim, they may take the matter to small claims court.
  • The landlord and the tenant should take pictures of the home, inside and out, showing the damage and keep them for future records. The pictures will be important should there be any dispute because of damage to the home.
  • If, due to a disaster, the landlord refuses to renew a tenant’s lease, terminates the month-to-month rental agreement or increases the rent substantially, a tenant can seek a court decision on whether the rental agreement or any part of it is unconscionable or if the landlord is acting in a retaliatory manner.

Hurricane Preparation Checklist for Landlords and Property Managers

preparedness_checklistWith over 30 years of combined experience in credit reporting, background screening and information services, the StarPoint team is here to provide you with the very best in products, technology and service.

Below we have create a few checklist that may be beneficial to you as a landlord or property manager in the instance a hurricane or storm is near.

PRINT CHECKLIST – PDF

Gather Important Information:
•    Make note important phone numbers and information
o    Nearest Hurricane Shelter:
o    Map of Evacuation Route(s):
o    Local Police Department:
o    Local Fire Department:
o    Insurance Company, Phone Number and Policy Number:
o    Tenant’s Emergency Contact Info: (Tenant Name, Where evacuating, emergency phone numbers)
•    Notify friends and family of your plan

Contact your Tenants
•    Give your Emergency Contact Information to your tenants
•    Get your tenant’s emergency contact information
•    Ask your tenants to park vehicles against the garage door and keep the gas tank full
•    Move furniture away from exposed windows and doors
•    Take all pets indoors to shelter them from the storm
•    Ask them to fill bathtubs and sinks with water in case water supply in interrupted or contaminated; turn off main water to house
•    Garden tools, awnings and grills should be anchored or sheltered
•    Set the refrigerator on maximum cold; do not open unless necessary; keep a full stock of non perishable items and canned foods
•    Stay in central room or on the downwind side of the house; move to another room as wind direction changes
•    Close all windows and storm shutters
•    Bring all lawn furniture inside or store it
•    Turn off propane tanks

Protect your Property
•    Turn off main gas valve before the storm hits
•    Install storm panels, plywood, or shutters over all windows, skylights, doors and open vents; tape exposed glass to protect from shattering
•    Prune dead or dying tree limbs
•    Insert wedges in sliding patio doors; if not protected, damaging winds will lift them off their tracks and blow them into the house
•    Elevate appliances and furniture off the floor and cover with plastic
•    Keep swimming pools filled to 12 inches below the edge; cover the filter pump and turn off the electricity; add additional chlorine
•    Lower radio and television antennas, protect satellite dishes
•    Close all outdoor electrical outlets and cover with duct tape
•    Secure garage and porch doors

Red Cross Supply Checklist for you and your tenant(s)
Provided by The Red Cross – (View PDF)

•    Water at least a 3-day supply; one gallon per person per day
•    Food—at least a 3-day supply of non-perishable, easy-to-prepare food
•    Flashlight
•    Battery-powered or hand-crank radio (NOAA Weather Radio, if possible)
•    Extra batteries
•    First aid kit
•    Medications (7-day supply) and medical items (hearing aids with extra batteries, glasses, contact lenses, syringes, cane)
•    Multi-purpose tool
•    Sanitation and personal hygiene items
•    Copies of personal documents(medication list and pertinent medical information, proof of address, deed/lease to home, passports, birth certificates, insurance policies)
•    Cell phone with chargers
•    Family and emergency contact information
•    Extra cash
•    Emergency blanket
•    Map(s) of the area
•    Baby supplies (bottles, formula, baby food, diapers)
•    Pet supplies (collar, leash, ID, food, carrier, bowl)
•    Tools/supplies for securing your home
•    Extra set of car keys and house keys
•    Extra clothing, hat and sturdy shoes
•    Rain gear
•    Insect repellent and sunscreen
•    Camera for photos of damage

Checklist for After the Hurricane?
Provided by The Red Cross – (View PDF)
•    Let your family know you’re safe
•    Continue listening to a NOAA Weather Radio or the local news for the latest updates.
•    Stay alert for extended rainfall and subsequent flooding even after the hurricane or tropical storm has ended.
•    If you evacuated, return home only when officials say it is safe.
•    Drive only if necessary and avoid flooded roads and washed-out bridges.
•    Keep away from loose or dangling power lines and report them immediately to the power company.
•    Stay out of any building that has water around it.
•    Inspect your home for damage. Take pictures of damage, both of the building and its contents, for insurance purposes.
•    Use flashlights in the dark. Do NOT use candles.
•    Avoid drinking or preparing food with tap water until you are sure it’s not contaminated.
•    Check refrigerated food for spoilage. If in doubt, throw it out.
•    Wear protective clothing and be cautious when cleaning up to avoid injury.
•    Watch animals closely and keep them under your direct control.
•    Use the telephone only for emergency calls.

Tax Advantages to Renting Your Property

Rental real estate offers tremendous tax advantages and opportunity for tax planning. Taxpayers can depreciate property, deduct interest on borrowed capital, exchange rather than sell properties to defer tax on gains, use installment sales to defer tax on sales, and profit from preferential rates on long-term capital gains. Most importantly, you can generate or monthly income, with depreciation deductions that effectively turn the actual income into tax losses.

Deductions Are Not Unlimited
Real estate income and loss is generally considered passive income and loss for tax purposes. Taxpayers generally cannot use passive activity losses (PALs) to offset ordinary income from employment, self-employment, interest and dividends, or pensions and annuities. The rental real estate loss allowance and real estate professional status are two important exceptions to this rule.

As one exception to the PAL rules, taxpayers with adjusted gross incomes of $150,000 or less can claim a rental real estate loss allowance of up to $25,000 for property they actively manage. Active management does not require regular, continuous, or substantial involvement. However, it does require that the taxpayer own at least 10% of the property. Also, to qualify for the exception, married taxpayers must file jointly.

The second exception allows real estate professionals not to treat their rental activity as a passive activity – losses are not limited to passive income. This exception requires material participation by the taxpayer which is demonstrated by meeting one of seven tests. These tests are complex and include the number of hours of participation and the facts and circumstances of the participation in the activity.

Vacation homes, however, are taxed depending on how long the homeowner rents the property. If you rent your vacation home for fewer than 15 days during the year, no rental income is includible in gross income. If you rent the property for 15 or more days during the tax year and it is used by you for the greater of (a) more than 14 days or (b) more than 10% of the number of days during the year for which the home is rented, the rental deductions are limited. Under this limitation, the amount of the rental activity deductions may not exceed the amount by which the gross income derived from such activity exceeds the deductions otherwise allowable for the property, such as interest and taxes.

Are you putting funds aside for property repairs?

This is something that is commonly overlooked and underestimated.  As a landlord, you have an obligation to keep your rental property in good condition for the tenant; not to mention, you want to keep your “investment” in the best condition possible to maximize your return both through rental income and once you decide to sell.  I am talking about improvements but I am also referring to the large repairs that must be completed on a home from time-to-time.  These repairs include roof, windows, siding, exterior/interior full paint, decking, flooring, lead based paint repairs, and so on and so on.  It is imperative to make sure that you put aside funds to cover these repairs.  According to www.costhelper.com, here are some estimates on major house repairs:

Roof

Do-it-yourself materials to install an asphalt shingle roof on an average one-story ranch-style home (with a gently sloping roof of 1,700-2,100 square feet) can run $680 -$3.700, depending on the quality of the materials. Having the old roofing materials removed and new asphalt shingles professionally installed is about $1,700 -$8,400 on a typical ranch-style home, depending on materials and location.

Gutters

Expect to pay around $3 -$5 a lineal foot to have someone install vinyl (PVC) gutters, or about $360 -$600 for 120 feet and $750 -$1,250 for 250 feet.  Having aluminum gutters installed averages about $4 -$9 a foot plus downspouts at $5 -$8 each, or $500 -$1,200 for 120 feet and $1,050 -$2,400 for 250 feet.

Exterior/Interior Paint

When hiring a painting contractor, paint and supplies make up about 15-25 percent of the cost, while 75-85 percent goes for labor. For exterior painting costs typically average $1,500-$3,000 for an average single-story, three-bedroom home, but easily run $3,000-$5,500 or more for a multi-story or multi-level larger house.    For interior painting, expect to pay $200-$400 to have a 12×12-foot room painted by a licensed contractor with brand-name paints; a 15×20-foot room or larger runs $300-$700 or more; and a 1,200-1,500 square foot home is $1,100-$2,000 or more. Having the ceiling painted bumps the cost to the high end of the scale.

HVAC

Adding central air conditioning to an existing forced-air heating system or installing a new HVAC system in a 2,000-square-foot house averages $3,500 -$4,000, and can be done by two technicians in 2-3 days, with little or no change to the existing ducting.

Keep in mind that with the new EPA laws governing renovation and work completed on a house built prior to 1978 there is a lot more cost involved in making repairs.  This cost will be most likely passed on by the contractor to the homeowner.  The cash reserve required for your rental property will vary with the style and size of the home.  A good rule of thumb is to keep at least 4x the monthly rent in a cash reserve.

Blog Post by John Durham, Marketing/Communications Director, Excalibur Home Management is an Atlanta Property Management Company

Why Rental Property is a Good Investment Now

The U.S. is on the cusp of a fundamental change in our housing dynamics.  Changing demographics and new economic realities are driving more people away from the typical suburban house and causing a surge in rental demand.  Tomorrow’s households want something different. They want more choice.  They are more interested in urban living and less interested in owning.  They want smaller spaces and more amenities.  And increasingly, they want to rent, not own.  Unfortunately, our housing policy has yet to adjust to these new realities.

Booming Rental Demand

  • One-third of Americans rent their housing, and nearly 14 percent—17 million households—call an apartment their home.
  • Changing demographics mean changing housing preferences.
    • Married couples with children are now less than 22% of households and that number is falling.  By 2030, nearly three-quarters of our households will be childless.
    • 78 million Echo Boomers are beginning to enter the housing market, primarily as renters.
    • 78 million Baby Boomers are beginning to downsize, and data shows seniors are more likely to rent after moving.
  • Between 2008 and 2015, nearly two-thirds of new households formed will be renters.  That’s 6 million new renter households.
  • Because of these changes, University of Utah Professor Arthur C. Nelson predicts that half of all new homes built between 2005 and 2030 will have to be rental units.

A Pending Supply Shortage

  • New multifamily construction set an all-time post-1963 low in 2009 at 97,000 new starts.  2010’s construction levels are predicted to be even lower.
  • We need to be building an estimated 300,000 units a year to meet expected demand.   Yet most forecasts suggest we will start fewer than half that in 2011.  That’s not even enough to replace the units lost every year to old age.
  • While there is a glut of single-family housing, on the apartment side we are heading toward a shortage as early as 2012.  The shortage of affordable rental units is particularly acute.  The Harvard Joint Center for Housing Studies estimates a 3 million unit shortage nationwide.

SSN Lookup – Check to see if a Social Security Number is Real

Are you unsure if a SSN is valid or do you think a tenant gave you a fake Social Security Number? There a few helpful websites out there to decode social security numbers including one by Steve Morse which by entering the first 5 digits of the person’s social you can find out the state and date range the SSN was issued.

SSN Decoder

SSN Decoder

For example I will check the social security number beginning with 421-11-xxxx.   I can see the social was issued in Alabama between 1981 and 1982.

If you would like more detailed information and would like to verify if the SSN matches the person’s name and if the SSN is listed as a deceased person you can purchase StarPoint Screening’s SSN Identification Verification Report. SSN ID Verifier searches more than 19 billion public and proprietary records to instantly verify identity based on basic driver’s license information and potentially fraudulent identities.

Sign-up and Order Now!

What does a -9999 credit score mean?

Fico -9999 credit score

Fico -9999 Credit Score

Have you ever ran a credit report and received a -9999 FICO score?  The FICO score range is between 300 and 850 but according to TransUnion a consumer would get a score of -9999 when the consumer has 2 or fewer trade lines for evaluation available.  If the consumer currently does not possess enough active credit accounts then TransUnion can not generate a positive score.  Also, please review our guide on how to read a TransUnion Credit Report.

Q. When does a -9999 FICO score usually appear?

A.In most cases we see a -9999 FICO score when a credit report is run on someone under the age of 20 and who has not yet applied for auto or student loans and who has not yet used a credit card or other line of credit. In other cases a -9999 can be generated for someone who has all their accounts in collections and two or less active tradelines.

Q. What can I do if my applicant receives a -9999 FICO score?

A. First you can review the credit report to see why the applicant received the score.  Are they a young adult without established credit or are they an adult who had filed for bankruptcy, has closed accounts, or has all their accounts in collections?

Contact Us
StarPoint Tenant Screening
520 East Zaragoza
Pensacola, FL 32502

Ph: 850-262-0002
Toll Free: 877-330-2444
Fax: 877-349-2175

info@starpointscreening.com