Criminal background checks take step back in North Carolina

Thanks to a change instituted by the Administrative Office of the Courts, those who want to see state criminal records on prospective tenants will have to pore through old files in a much slower computer database system than what was previously being used.

According to the AOC, the change was necessary to protect the secrecy of criminal records that have been expunged. Through the previous protocol, the most cost effective way to search for criminal records was for private vendors to buy access to the state’s database. In some cases that information was outdated, meaning convictions or charges that had been expunged were still showing up on people’s records.

Criminal records in North Carolina are public. But the electronic system that keeps them is difficult to manage and nearly impossible for the average person to search records across the state. People can visit local courthouses and search criminal records, but they can see results only for that particular county, not the whole state.

It’s hard to say what this means for tenant screening services, but costs could rise as vendors are forced to pay more to get the information they need for their clients.

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Make sure that rental application is legible

Many tenant applications are filled out hastily, as applicants want to get their paperwork back to you before anyone else scoops up the place their interested in renting. The first mistake a landlord can make when reviewing an application is to assume something — anything — when trying to decipher someone’s handwriting. If you’re unclear whether that digit in someone’s social security number is a 6 or a 0, don’t guess! Likewise, don’t guess about the spelling of a person’s name. When it comes to background checks, you’ll need the following information to be rock solid:

1. You’ll need the person’s social security number in order to do a credit check. Thousands of people have common names and birthdays, and if you guess on even one of the person’s social security numbers, you might end up pulling the wrong person’s credit.
2. You’ll need a correct spelling of the full legal name and date of birth for any criminal background check or previous eviction check. Most public records databases have removed SSNs from their files. So screening providers use the name and DOB identifiers to narrow down their search. So a criminal record for “Thomas McMurray, born 6/2/1987” may not come up if the landlord inputs “Tom McMurry, born 6/7/1987.”
3. You’ll also need the proper spelling of the applicant’s name to do a state or national search in sex offender registries.

If something is unclear, call the applicant and double-check. Also let them know that if you have to re-run a background check because the information wasn’t clear and correct, they’ll have to foot the bill.

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Renting to College Students

College students get a bad rap when it comes to being good tenants. There are many, many college students out there who are hardworking, studious and responsible. Their lives are about much more than fraternity parties and March Madness. But they are young, which means for many of them the lease they sign with you very well may be the first lease they’ve ever signed.

Because of this age-based ignorance, the landlord that does a good job of being very forthcoming and patient during the application and lease-signing process has the best chance of forming a positive landlord-tenant relationship that leads to timely rental payments and respect for the property.

Be proactive in explaining things the students might not think to ask about. If utilities are not included in the rent, be sure that’s made known and give them the average monthly cost of utilities so they can factor that into their budgets. 

Tell students about the benefits of renters insurance, which doesn’t cost much but can protect them in the event that their belongings are damaged or stolen.

Finally, make sure they read the entire lease before they sign it, and go over each part with them so you know they’re paying attention. It may sound like hand-holding people who are supposed to be adult enough to sign a legal contract, but it’s worth the extra effort if it means less headaches for you later on.

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Credit Bureau’s Use of Rental Payment History Drawing Mixed Reviews

Experian RentBureau, one of the big three credit bureaus, recently began collecting data about consumer rental payments and including that data in its credit reports. Many see this as a positive step, particularly for those who are credit-worthy even if they don’t yet have traditional forms of credit, like credit cards or mortgages. Before this change, a lot of responsible people who don’t have a lot of credit were left at a disadvantage. Now their rental payment history can help boost (or lower) their credit scores. 

Still, there are some skeptics out there. Some point out that RentBureau’s database only covers about 8 million renters. That’s just over one-fifth of U.S. rental households, which is estimated at about 39 million. That leaves a ton of renters still at a credit disadvantage, even among their renting peers.

Others say reporting information on rental payment history may have a negative effect on low-income families struggling to pay the bills during the current recession. If an individual’s scores dip after a few late rent payments it’s not necessarily because that tenant is suddenly irresponsible, but because the economy is making it difficult for anyone to make ends meet.

As with any issue pertaining to credit reports, there are always two sides to a story. That’s why it’s important to stay on top of one’s own credit score, to know where you stand with creditors and lending agencies, and to dispute any inaccuracies.

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Recruit Neighbors To Watch Over Your Investment Property

Sometimes even the most attentive landlord isn’t around his or her property all the time. Unless you live right next-door, chances are a lot of your tenants’ behavior — and possible trouble — will go unnoticed by you unless someone tells you directly.

There’s no need to wait until the police call you to tell you about an arrest or other issue that happened at your property. The best observers of a tenant’s activity are that tenant’s neighbors, whether they also are your tenants or not.

Get to know the property owners who live near your rental property, and give them more than one way to contact you if something is amiss on your property. They have a vested interest in keeping their neighborhood safe and clean — and property values up — so they will be more than happy to send you an email or call you if they see or suspect trouble. Retired residents and stay-at-home moms are particularly helpful, because they’re home more than most and are fairly observant of their surroundings.

Increasing the number of eyes and ears on your property means you’re more likely to be alerted if there is a domestic violence issue, problems with people (or pets) that might not be on the lease, noise complaints, or another symptom of a problem tenant that didn’t show up on an instant tenant report or background check.

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Tips for Renting to College Students

March Madness is upon us, in more ways than one. Of course this is the time of year our attention turns to college basketball, tournament brackets and underdogs. But college students also are in a state of March Madness of another reason — housing issues. Specifically, now’s the time they start scrambling to secure off-campus housing for the coming school year.

Here’s what you should know about renting property to college students:

1. Make sure that the college students renting the apartment make enough money to cover the rent, or have their parents cosign the lease.

2. Make sure they understand the rental agreement is for one full year, not just during semesters. If they’re going to head “home” for the summer, they’ll need to find someone to sign a sub-lease or they’ll have to cover the rent themselves.

3. Make sure each person on the lease is responsible for the entire rent amount. College students sometimes switch roommates and housing mid-year due to personal conflicts, internships or studying abroad, so each tenant has to understand he/she is responsible for paying the entire rent amount until a new roommate is found and the lease is transferred.

4. Get a full security deposit to protect your assets from potential damage. College students are largely a responsible bunch who will respect your property while they live there, but parties and other gatherings will bring plenty of people through your place who might not be so respectful. It’s best to get a healthy security deposit and go over just what kind of cleaning and repairs will come out of that deposit if necessary.

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Many Americans Don’t Understand Credit Scores

According to a recent survey by the Consumer Federation of America and VantageScore Solutions, many Americans don’t really understand what goes into creating their credit score or how it may be used.

Among the findings, the majority of those surveyed didn’t know that a landlord or property manager could use a rental applicant’s credit score as a factor in deciding whether or not to approve them for a lease. About 67 percent of respondents incorrectly assumed age is a determining factor in the credit score, though nearly half knew the basic purpose of a credit score is to assess the risk for lenders of whether a borrower will or won’t repay a loan.

More than 1,000 Americans were surveyed by phone, averaging a D in total knowledge about credit scores, according to the survey results. VantageScore is a joint venture of three credit bureaus -- Equifax, Experian and TransUnion -- and calculates credit scores on a scale from 501 to 990.

Many may be ignorant about a credit score’s purpose or use, but that doesn’t mean a landlord shouldn’t use it. On the contrary, a thorough tenant screening and credit check are tops on the list of ways a landlord will know whether a tenant is lease-worthy.

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