What to Look for When Screening Tenants

Bad tenant selection is how landlords lose money. Not bad markets, not bad loans - bad tenants. The good news: this is almost entirely preventable if you do the screening right, every single time, before anyone signs anything.

What you’ll learn:

• The written criteria you need before you list the unit
• What a credit check actually tells you
• Why you should call the landlord before the current one
• How Fair Housing law shapes every step of this process

Why does tenant screening matter so much?

One bad placement can cost you thousands of dollars and months of your life. Unpaid rent, property damage, an eviction that drags through the courts for four months - all of that starts with skipping steps during screening. A good tenant, on the other hand, often stays for years, pays on time, and tells you when the water heater starts making a strange noise. The difference between those two outcomes is almost entirely determined before they move in.

What should my screening criteria be before I list the unit?

Write your criteria down before you accept a single application. Minimum credit score, income requirement (typically 3x monthly rent in gross income), rental history standards, and any criminal background policy you have. Having this in writing protects you legally and keeps you consistent. If you make up the standards after you see who’s applying, you’re exposed to a fair housing complaint.

How do I use a written application?

Every applicant fills out the same written application - no exceptions. A solid application asks for the full legal name, current and previous addresses for the last 2-3 years, employer name and income, personal and prior landlord references, and written consent to a background and credit check. Use the same form for every applicant. Keep all applications on file for at least three years.

What does a credit check tell me?

A credit check shows you how someone handles financial obligations when no one’s watching. Look at payment history (consistent late payments are a pattern, not a bad month), outstanding debt relative to income, any eviction judgments or civil judgments on public record, and bankruptcies - note how recent and the circumstances. Use TransUnion SmartMove, RentSpree, or Avail. Charge applicants the screening fee - it’s legal, it’s standard, and it filters out people who aren’t serious.

How do I verify income?

Require gross monthly income of at least 3x the monthly rent. For a $1,400/month unit, that’s $4,200/month - no exceptions. Verify with the last two pay stubs, the last two bank statements, or an offer letter if they were recently hired. For self-employed applicants, ask for the last two years of tax returns. A tenant who earns $2,000/month cannot reliably pay $1,200 in rent, no matter how convincing their explanation is.

How do I check rental history the right way?

Call previous landlords - and here’s the part most new landlords miss: don’t rely only on the current landlord. The current landlord may give a glowing reference just to get a problematic tenant out the door. Call the landlord before that one. Ask whether they paid on time, whether they left the unit in good condition, whether there were any lease violations or noise complaints, and - the most revealing question - whether they would rent to them again. A pause before that last answer tells you a lot.

What do I need to know about Fair Housing law?

The Fair Housing Act prohibits rejecting applicants based on race, color, national origin, religion, sex, familial status, or disability. Many states and cities add protected classes on top of that (source of income, sexual orientation, and others). Your screening criteria have to be objective, written down, and applied identically to every applicant. If you decline someone, document the reason in writing using only your stated criteria. If the rejection was based on a credit or background check, federal law requires you to send an adverse action notice under the Fair Credit Reporting Act. Look this up and know the requirements before you start screening.

What do I do once I’ve made a decision?

Approve the best-qualified applicant based on your written criteria. Collect the security deposit and first month’s rent before you hand over keys - not after. If you’re declining someone, send a written notice. If a consumer report was involved, send the adverse action notice within the required timeframe.

Keep records of every application, every decision, and every piece of documentation you used to make that decision. If a fair housing complaint ever comes up, this paperwork is your protection.

Screening consistently is not complicated. Write the criteria down, follow them every time, and keep records of everything. That’s it. Landlords who do this well rarely deal with the nightmare scenarios - because the nightmare scenarios don’t get past the application.