As a rental agent, you should be prepared to encounter various kinds of personalities among rental applicants and different issues in their application.

You will often find red flags that are instant dealbreakers, while some may not be as alarming. One of the common things rental agents encounter these days is a frozen credit. That is when an applicant has frozen their credit report, which makes it challenging for agents to conduct a thorough credit check on the applicant.

Importance of Credit Checking

A background check is crucial in the tenant-screening process because a tenant must be trustworthy, responsible, and financially stable to spare the landlord from encountering problems with them in the future. Although it is not a perfect system in terms of guaranteeing no landlord-tenant conflict will occur throughout the entire tenancy, it has been shown many times that it minimizes the odds. It is no surprise why the practice of conducting background checks has continued up to this day.

Aside from evaluating the attitude of the applicant and their rental history with other landlords, one of the most important parts of tenant screening is credit checking. A good credit score signifies that an applicant is financially responsible would less likely default in paying rent. A tenant who is not financially stable is often the downfall of a rental business because it can only thrive if the landlord profits from rental income. To put it simply, if tenants can’t pay, the landlord will lose his business.

Why Tenants Freeze their Credit

With most systems going digital and more data being easily accessible to the public, several scammers and hackers commit identity theft. There have been so many instances when someone’s information was illegally acquired and used for criminal acts.

Since credit bureaus have information that can be useful for identity thieves or even by no-good relatives, people resort to a credit freeze. When someone enacts a credit freeze with credit reporting companies or similar third-party companies, it means that he or she does not permit the company to release any of their data without their proper and prior consent. Enacting a credit freeze is a way of protecting one’s identity from being stolen and taken advantage of.

Hiding Bad Credit

Although it is understandable why individuals enact a credit freeze with credit bureaus, it has also opened an opportunity for individuals with a bad credit standing to conceal their credit history from landlords, banks, lenders, or other companies who need such information.

In the case of individuals trying to find a place to rent, they can trick the landlord or rental agent not to check credit reports (and discover their poor credit) with the excuse that the credit freeze is there because of the fear of identity theft. However, it is common knowledge among rental industry players that it is never a good idea to grant someone tenancy without ensuring that they can afford (and will pay) the rent.

What Rental Agents Can Do

Regardless if you are nearing desperation to fill in a vacancy, you must not allow an applicant to convince you not to run a credit check. Doing so can jeopardize your credibility as a residential rental agent, especially when the tenant you exempted from credit checking defaulted in paying the landlord in the future.

Do not be afraid to require credit checks from your applicants. If they legitimately requested the credit freeze from the credit company, it means that they have the choice to release their credit information for your screening purposes. If they refuse to do so, it most likely means that they are concealing something from you.

Do not be afraid if your requiring of credit report discourages an applicant from renting because it’s one way of weeding out potentially bad tenants from your pool of applicants.

When you publish a listing on Padleads, then applicants start reaching out to rent, be clear from the get-go that you will be conducting a thorough and complete background check, which would require them to cooperate and provide the financial data you need. If they refuse or make excuses not to do so, you have to be okay with letting them go. After all, you can still find other applicants who have the willingness to prove that they deserve to be tenants.