What are Rental History Reports?

As the saying goes, “History repeats itself.” Landlords and property managers rely on rental history reports to assess a rental applicant’s past performance as a tenant.

When a tenant has a positive rental history, they will likely be dream tenants — responsible, respectful, and on-time with payments.

The logic also works in the reverse with applicants who have a negative rental history being more likely to repeat their past transgressions. All in all, it pays (literally!) to consider rental history reports when vetting a potential tenant.

Here’s everything you need to know about rental history reports, including how to use them during the tenant screening process. Let’s get started!

What are Rental History Reports?

A rental history report is a document generated by a special reporting agency that contains a comprehensive look at a renter’s rental history. A rental history report may include information about a tenant’s past evictions, past landlords, past rental addresses, debts, and other important rental information.

Many special reporting agencies provide tenant screening services for landlords. As a part of these services, the agency will include a rental history report _and _information relating to a tenant’s credit history.

Rental history reports differ from credit reports, though landlords generally use both during the tenant screening process.

A tenant’s credit report doesn’t typically include information about their rental history or any past landlord debts unless the landlord has reported the debt to a credit bureau or sent the debt to a collections agency.

However, it’s common for tenant screening reports to include credit information, such as a tenant’s credit score, accounts, and debts, alongside the tenant’s rental history.

TL;DR: Rental history reports are not credit reports, but specialty reporting agencies may offer tenant screening services and tools that pull a comprehensive report with a credit report, background check, and eviction report.

Why You Should Look at Rental History

Reviewing a tenant’s rental history is an important part of the tenant screening process. As the tenant screening process serves as a way for a landlord or property manager to vet a tenant, you’ll need to do a thorough background check, including assessing a tenant’s rental history.

Generally, it’s easy to spot a good tenant simply by taking a look at their rental history report, as it includes positive attributes that signal their history of excellent tenancy.

For example, a tenant with a lengthy rental history (five or more years), no evictions, positive landlord references, and an excellent credit score would be considered a dream tenant by most landlords.

Generally, positive rental history indicates that the tenant has a track record of paying rent on time, is financially stable, and will likely treat your property with respect (aka no property damage).

On the other hand, a prospective tenant may have some negative marks on their rental history report. Past evictions, previous rental debt, and other negative attributes can make many landlords and property managers hesitant.

That said, finding negative marks in a tenant’s rental history shouldn’t disqualify an applicant automatically, unless you feel very strongly that they would not be a good candidate for your property.

If an applicant seems good on paper, discuss the negative marks with them in person. For example, an eviction could always be a result of a lost job or even a pandemic.

In short, landlords and property managers should look at rental history to gain an in-depth understanding of what a prospective tenant’s past indicates about their future as your tenant.

What to Look for in Rental History Reports

Reading a rental history report is pretty straightforward, though you must read it thoroughly. If you just skim the report you risk missing crucial details that may influence your decision to move forward with the applicant.

There are a few essential items to look out for when reading an applicant’s rental history report, including:

• Credit History: If you opt for a tenant screening report with an applicant’s credit history, it’s important to assess this information — don’t skip it! Use a tenant’s credit history to assess their financial situation and determine whether you feel confident in their ability to pay their rent on time. Though it’s possible to rent with bad credit, it’s up to landlords to determine whether or not to overlook a bad credit history.
• Rental Red Flags: Frequent changes of residence, inconsistent application information, and poor landlord references are all indicative of an unreliable and unstable tenant.
• Evictions: No eviction is straightforward, but they generally indicate a major breach of a lease agreement. This is especially true in states like New York, where tenant evictions are only reported if the tenant has been found at fault in a legal eviction case.
• Income: Generally, landlords prefer that a tenant’s pre-tax earnings are at least three times the monthly rent. However, that’s just a standard, you may choose to have a higher or lower income requirement. Regardless, you want to see that a tenant earns enough to make you feel confident that they will be able to comfortably afford rent.
• Criminal Background: First and foremost, if an applicant has a criminal background, you’ll need to consult HUD’s guidelines and your local laws to determine how to handle the situation.

Others Ways to Check Rental History

Checking a prospect’s rental history isn’t limited to running potentially costly rental history reports. Moreover, it can be time-consuming to sift through all the tenant screening services on the market to determine which is best for your needs.

If you want to avoid all of that, you’re in luck. Fortunately, asking the right questions on your rental application and committing to a thorough screening process is often enough to paint a detailed picture of your tenant’s rental history.

Request the applicant’s previous landlord’s contact information in your rental application and ask for additional relevant rental information including a name, the property address, and the rental period.

Be sure to check up on any named landlord by researching local records. This will help you avoid any tenants who are being misled about their rental history and are generating positive references from fake landlords.

Once you have confirmed the legitimacy of the landlord reference, it’s time to get all the information you need. Ask about the condition they left the unit in, tenant behavior, rent payment history, and whether the security deposit was refunded.

Learning more about how the tenant performed in their past rentals is a great way to predict whether they might be a good fit for your unit.

What If Tenant Doesn't Have Rental History?

There are several reasons as to why a tenant might not have a rental history. For example, you might consider a recent college graduate or a military service member who will be renting for the first time.

Fortunately, it’s still possible to screen tenants without a rental history, though you won’t be able to get information about their rental history, you can still build a pretty accurate prospect profile with the right information.

Here are some essential pieces of information you’ll need to collect from tenants with no rental history.

• Proof of Employment: An applicant’s proof of employment and income can demonstrate their ability to pay for rent and speak to their ability to hold onto a job.
• Personal References: Not all personal references should hold the same weight. For example, you should refrain from accepting personal references from applicants’ family members and friends, as these present potential conflicts of interest. References from coworkers, supervisors, professors, mentors, and other more formal relationships should be considered.
• Cosigner or Guarantor: In most cases, a cosigner or guarantor is used when a landlord or property manager isn’t confident in a prospect’s ability to cover rent. However, they can also be used when a landlord isn’t confident in a tenant’s rental history (or lack thereof), but is willing to rent to them with the support of someone who will cover the cost of rent or damages.

With proof of income, personal references, and a cosigner or guarantor, you can determine whether you are comfortable renting to an applicant based on the profile you build.

Final Thoughts

Tenant screening isn’t easy, but it is absolutely essential for finding good tenants. To complete a successful tenant screening, you’ll need to assess a prospect’s rental history to determine whether you are confident that they will be a good fit for your apartment.

Fortunately, filling a vacant unit isn’t all tedious tasks and evaluating prospects. In fact, it can be quite easy when you use the right apartment listing platform. Luckily, you’re already here!

Get your apartment vacancies filled by listing your units on Apartment List and letting us bring the prospects right to you.

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