IndiaPost.com - Tenant screening could cost you rental

The process of finding the perfect rental house or apartment can range from hectic to nearly impossible. But it could be worse: Picture yourself locating that long sought-after apartment or town house only to be rejected by your prospective landlord because of a negative report from a company you've never heard of. Sound like a nightmare? Unfortunately, for many Americans it's all too real.

Of the approximately 37 million rental units in the U.S., 17 million are overseen by professional property managers. Many landlords, especially those who supervise large multifamily apartment buildings, rely on tenant screening bureaus to check the background of potential customers.

These companies collect information from court records, police blotters, credit bureaus and other sources to help identify risky tenants before they become headaches. Sounds reasonable, right? Unfortunately, because of the way these screening services collect and store information, responsible tenants can sometimes be branded as risky and can be at a serious disadvantage in tight rental markets. As with nearly all money matters, one of the most important factors in determining whether you'll pass a tenant screening bureau check is your credit history.

Almost every tenant screening company runs a credit check through at least one of the big three credit reporting agencies: Equifax, Experian or TransUnion. "They're going to look at consumer credit data," says Steve Katz, director of corporate communications at TransUnion, which entered the tenant screening industry in 2004 through the acquisition of RentPort, Inc.

"They have to make sure that the individual has a history of being able to meet their financial obligations." Blacklisting tenants But credit reports are only part of the overall screening process. Tenant screening bureaus collect information from a surprisingly wide range of sources, including utility companies, state governments and even clerks of court. One particularly controversial practice involves sifting through civil court records and archiving the names they find, effectively creating "blacklists" of every tenant that has been involved in litigation with a landlord.

The country's largest tenant screening company, First Advantage SafeRent, recently settled a case alleging that they had intentionally provided incomplete information, purposely excluding the verdicts of tenant-landlord lawsuits in their tenant reports to landlords. The reason: The verdict, even if it showed the tenant to be clearly in the right, was irrelevant; that they had been involved in a suit was enough to make them a serious risk for a prospective landlord.