A tenant credit report is a crucial document for a prospective landlord and a prospective tenant. The property owner can use the information in the report to determine the applicant’s ability to maintain the financial obligations of a lease. A credit report contains information such as employment information, tradeline summaries, previous addresses, current credit information, and public records such as bankruptcies, liens and judgments.
Public records play an important part in the background check process, as well. Public records contain negative information that silently speaks about the person’s creditworthiness. The following are types of information that a prospective landlord or property owner may find in the public records section of an applicant’s tenant credit report:
Bankruptcies are an additional piece of information that a prospective landlord would find in the public records section of a tenant credit report. Bankruptcies are legal declarations that a consumer is unable to pay his or her debt. Such declarations can remain on a person’s credit report for as long as seven years. A prospective landlord may see a bankruptcy as an indication that a debtor has money management problems and issues with other lenders. Alternatively, a property owner could see a recent bankruptcy as a clean slate for a prospective tenant.
Civil judgments appear in the public records section of a tenant credit report. Civil judgments can consist of a wide variety of negative information. A civil judgment occurs whenever a party or person sues a debtor to collect a sum of money. The suing party may be a bill collector, a person who was involved in an accident, or some other injured party. If the courts rule against the debtor, then the civil judgment will show up on the report. The report will show the date the court made the judgment, the amount of the debt, and the status of the debt.
Tax liens appear on a tenant credit report. Tax liens occur because of unpaid taxes. A debtor should pay all tax debts to increase his or her chances of being accepted for a lease agreement.
Property owners should make their decisions based on all the information in the credit report rather than just the negative information.