How to Run a Credit Check on Tenants: Easy 6 Steps Guides for Landlords

Running a credit check is one of the most crucial steps in your tenant screening process. In my 20 years as an investor and a property manager in Oklahoma, I have seen many landlords learn this the hard way, dealing with missed rent payments, costly evictions, and endless headaches that could’ve been avoided with a simple tenant credit check.

How to run a credit check on tenants isn’t rocket science, but doing it right can save you thousands of dollars and countless sleepless nights. A credit check on a tenant is a process of reviewing a potential tenant’s credit report to assess their financial responsibility and creditworthiness. When you run a credit check on potential tenants, you’re getting a transparent look at their payment history, outstanding debts, and whether they’ve honored their financial commitments.

In this blog, I’ll walk you through my proven 6-step process for conducting thorough credit checks on tenants, including what information you need and how to interpret those reports correctly. Let’s make sure your next tenant is someone who’ll actually pay rent on time.

Why is Checking Tenant’s Credit Important?

Skipping credit checks is the fastest way to turn your rental property into a financial nightmare. I’ve seen too many landlords learn this expensive lesson after accepting tenants based on their gut feeling or a charming personality. Hence, credit screening through credit check isn’t just optional but an essential way to screen quality tenants.

The purpose of conducting a credit check on prospective tenants is to ensure that they will pay rent on time and fulfill their financial obligations in the future when they are under a lease agreement. If a tenant has a good credit score and a positive credit history, it indicates that they are financially responsible and are significantly less likely to miss rent payments or break lease agreements early.

Moreover, credit checks protect you from costly problems. Evicting a non-paying tenant costs thousands of dollars when you factor in legal fees and lost rent. A $40 credit check upfront saves thousands later. When you spot warning signs through credit reports; you can move to better applicants.

Credit reports also reveal debt-to-income ratios that income verification alone misses. Someone might earn good money but already be drowning in debt. Combined with background checks and rental history verification, credit checks complete your financial risk assessment.

Finally, credit checks help you remain legally compliant and avoid discrimination claims. When you apply consistent, objective criteria to all applicants based on credit standards, you protect yourself from fair housing law violations. You’re making data-driven decisions, not subjective judgments. This documentation becomes crucial if an rejected applicant ever questions your decision-mark.

What Information is Needed for a Credit Check?

Before you can run a credit check, you’ll need specific information from your prospective tenant. The basics include their full legal name, current address, date of birth, and Social Security number (SSN). These details allow credit bureaus like Equifax, Experian, and TransUnion to pull the correct report.

You’ll also want to collect their address history for the past two years; this helps verify identity and prevents fraud. Some landlords request employment details and proof of income, though these are typically part of your broader tenant screening process rather than the credit check itself.

How Do You Run a Credit Check Manually?

Running a credit check manually can sound complicated, but I promise it’s more straightforward than you think. Once you understand the process, you can complete it in under 30 minutes. Let me walk you through each step on what worked the best for me:

Step 1: Get Written Consent From Your Tenant

Before you run a credit check on tenants, you must obtain their written permission. You cannot and I repeat, you cannot run a credit check without a written consent from the applicant because it is a legal requirement, under the Fair Credit Reporting Act(FCRA).

Include an authorization section directly in your rental application. It should be mentioned explicitly, for instance: “I authorize [Your Name/Company] to obtain a consumer credit report for the purpose of evaluating my rental application.” Then you should have the applicant sign and date it.

My pro tip is to keep these authorization forms for at least two years. Why? This document acts as a legal protection if an applicant ever claims you ran a credit check without their permission. I store mine both digitally and in physical files; you can never be too careful when it comes to compliance.

Step 2: Choose a Credit Reporting Agency

You have several options here and each comes with different pricing and features. The three major credit bureaus (Equifax, Experian, and TransUnion) offer landlord-specific screening services. However, I recommend using specialized tenant screening services like OKC Home Realty Services that aggregate data from multiple bureaus.

If managing multiple properties, a screening service can automate and streamline reports. For manual checks, register with a credit bureau that offers landlord services and follow their process for requesting tenant reports.

Step 3: Create Your Account and Input Required Information

Once you’ve chosen your service, you’ll need to set up a landlord account. This typically requires:

• Your name and contact information
• Property address you’re screening for
• Payment method (credit card or bank account)
• Business information if you operate as an LLC

After your account is active, you’ll need to enter the tenant’s information. This include:

• Full legal name
• Date of birth
• Social Security Number or Taxpayer Identification Number
• Previous addresses
• Employment and income details

Step 4: Submit the Request and Pay the Fee

Credit check fees usually range from $25 to $75 per applicant, depending on the information requested. In states like Oklahoma, you can legally charge applicants a screening fee to cover this cost, but it must be reasonable and reflect actual expenses. Some services allow you to send a request directly to the applicant’s email, where they input their own information and authorize the check, creating a clear electronic consent trail.

Once submitted, most online services process requests instantly or within a few hours. Traditional methods through direct bureau contact might take 24-48 hours, though this is becoming rare in 2025.

Step 5: Review the Credit Report

This is where your judgement as a landlord truly matters. When the credit report arrives, don’t just glance at the credit score; dig into the details. I’ll cover interpretations in the next section thoroughly, but during your manual review, you can examine payment history over the past 24 months, outstanding debt, debt-to-income ratio. Also look for red flags like bankruptcies, eviction history, foreclosures and unpaid utility bills.

Step 6: Document the Finding and Make Informed Decision

Use the information from your findings to make a decision and make sure to document your decision in writing. Use this information along with other screening factors like employment verification and rental history to make balanced tenant decisions. If you approve the tenant, keep the credit report in a secure file; you’re legally required to protect this sensitive information under federal privacy regulations. If you reject the application based on credit information, you must provide an adverse action notice within three days.

What to Look for in a Tenant Credit Report?

When you are looking at the tenant credit report for the first time, it can be overwhelming. Trust me, I’ve been there before. Good news for you; I’ve conducted hundreds of credit checks and I can confidently say that you can focus on these key elements to make a smart decision:

1. Credit Score

A credit score is a three-digit number that represents the tenant’s creditworthiness. However, there is no one-size-fits-all to this but you can follow these general guidelines:

• 700+ : Excellent credit, low risk
• 650-699 : Good credit, moderate risk
• 600-649 : Fair credit, higher risk
• Below 600 : Poor credit, high risk credit score

2. Payment History

This is arguably more important than the score itself because it shows actual behavior, not just a calculated number. Look for patterns of late payments, collections or charge-offs. One missed payment during a documented hardship is understandable, but chronic missed payment across multiple accounts spell trouble.

3. Debt-to-Income Ratio

Calculate their monthly debt obligations against their income. If they’re already stretched thin paying credit cards and car loans, adding your rent might push them over the edge. Keep total obligations under 36% of gross income.

4. Public Records

These records include bankruptcies, foreclosures, tax liens and eviction history. A bankruptcy from several years ago with a clean recent history can be acceptable but recent evictions are major red flags that predict future problems.

5. Credit Inquiries

This shows if the tenant is applying for credit frequently, which might indicate financial distress or that other landlords rejected them.

6. Personal Information

Personal information of the applicant on the credit report is helpful to make sure it matches with the ones they provided on their rental application.

How to Interpret Credit Reports for Better Tenant Decisions?

Reading a credit report is one thing but interpreting it wisely is another. Being able to analyze and interpret the report helps you identify the warning signs of a bad tenant. Here’s how I interpret the reports to make confident leasing decisions:

1. Look at Trends, Not Just Static Numbers

A credit score that dropped from 750 to 680 recently requires investigation; why did it happen? Was it a temporary setback or beginning of a financial decline? Conversely, someone rebuilding their credit from 580 to 640 over two years shows positive momentum, financial discipline, and a commitment to improvement that often predicts reliable tenancy.

2. Understand the Context

Not all negative marks carry equal weight for rental decisions. Medical collections are unfortunate; healthcare debt affects millions of Americans, but this doesn’t mean they’ll skip rent. However, unpaid utility bills, cable company collections, or debt to previous landlords? These are directly relevant warning signs that reflect how they handle housing-related obligations.

3. Calculate and Verify the Rent-to-Income Ratio

Cross reference the credit data with the verified income documentation to ensure affordability. Their monthly income should be at least three times your rent amount. Someone earning $4,000 monthly can reasonably afford $1,300 rent, especially with good credit.

4. Consider Recent Vs Old Information

Credit reports show seven years of history, but recent activity matters most. Perfect payment history for the past two years outweighs problems from five years ago, especially if they can explain what changed.

What Legal Requirements You Must Know Before Running Credit Checks?

Before you begin conducting credit checks on prospective tenants, you need to be aware of some legal considerations. This helps you to stay Fair Housing compliant and avoid any fines or penalties. The most significant one is to get a written consent for the applicants, approving to run a credit check on them. The FCRA requires you to have explicit authorization, protecting the applicant’s privacy and fostering transparency.

Something most landlords miss is to send an Adverse Action Notice to the applicant, after a rejection based on their credit score. While you may think that simply providing rejection email, but no; you are legally obligated to send an Adverse Action Notice and follow proper procedure to dispose of sensitive information.

What If a Tenant Cannot Authorize a Credit Check?

Sometimes you face a situation where an applicant may not give you permission to conduct a credit check. Throughout my many years in the real estate field, I’ve come across this exact problem many times. In such situations, you generally have the right to deny the rental application. You can include credit checks as one of the standard processes in your tenant screening process to protect your investment and ensure reliable rent payments.

Tenants may be unable to authorize credit checks for various reasons and sometimes they cannot control it. At times like this, you can rely on alternative ways to screen tenants like using soft inquiry services, income proof, employment, and rental history checks to demonstrate their financial stability and responsibility. However, you must always apply the same standard to every applicant to remain compliant to Fair Housing and anti-discrimination laws.

Get Professional Help from Expert Property Management Company

Running a credit check, verifying income, and staying compliant with FCRA and Fair Housing rules can create a complex workflow for you when you are trying to do everything on your own. When the process of credit checks becomes time-consuming or legally sensitive, a professional property management partner eliminates the stress and handles screening with accuracy and consistency.

At OKC Home Realty Services, we specialize in expert tenant screening, including thorough and accurate credit checks. Our experienced team handles every step; from obtaining tenant authorization to interpreting credit reports, so you can make confident leasing decisions.

Ready to streamline every step of your rental process?. Let us take the hassle out of tenant credit checks and property management so you can enjoy a stress-free investment experience. Contact OKC Home Realty Services today to learn how our professional property management services can protect your investment and provide peace of mind.