<\/p>\n
In the same way lenders<\/a> scrutinise the credit history of home loan<\/a> applicants, it\u2019s now standard for Australian landlords to run credit checks on prospective tenants.<\/strong><\/p>\n Landlords run such checks to ensure would-be tenants have a solid financial track record and a history of paying rent and looking after properties.<\/p>\n Both private landlords, who manage their own properties, and property managers, employed to do the job on behalf of owners, run checks using fee-for-service agencies like Equifax and Tica, which offer<\/a> financial and tenancy-specific searches.<\/p>\n Landlords can run credit checks before they agree to lease out their investment properties. Picture: Getty.<\/p>\n<\/div>\n In the case of a private landlord, they can pay \u201cper check\u201d, while real estate<\/a> agents generally have a subscription, which allows for multiple checks. In both cases, the applying tenant provides government-issued identification, which is then used as the basis for an online check.<\/p>\n Finn Simpson, from Belle Property in Dee Why, said credit checks empower property managers to make the best decisions for their landlords.<\/p>\n \u201cA poor credit check likely signifies that the tenant is not good at keeping financial commitments. If this is the case, we\u2019d rather not appoint them as tenants, as it may mean the landlord will be out of pocket, plus it\u2019s a headache for the agent to keep chasing money from the tenant,\u201d he said.<\/p>\n Diane Bukowski, managing director of eezirent, an online tool for self-managing landlords, said searching national tenancy databases is the \u201cmost important piece of risk minimisation\u201d a landlord can do.<\/p>\n \u201cIt\u2019s not difficult for a person who is \u2018blacklisted\u2019 or has other financial issues in their past to conceal this on the standard rental application,\u201d she said.<\/p>\n \u201cRelying on your gut instinct won\u2019t count for much when the rent is unpaid and the property is damaged \u2013 things a landlord might have learned at the application stage.\u201d<\/p>\n A \u201csoft\u201d check refers to the application process private landlords and property managers have always managed themselves, looking over submitted paperwork and making general enquiries about an applicant\u2019s financial situation to determine if they can pay the rent.<\/p>\n A \u201chard\u201d credit check is an official enquiry into a tenant\u2019s credit report and is used by creditors when a person is seeking a loan<\/a>. A tenant\u2019s permission is required before a hard check, as it is counted in their credit score and can affect it.<\/p>\n There are different types of credit checks that can be undertaken when leasing a property. Picture: realestate.com.au\/rent<\/p>\n<\/div>\n Credit checks scan credit bureaus, flagging any bankruptcy information and also if a person has been banned or disqualified from managing a business, Mr Simpson explained.<\/p>\n \u201cIt will bring up any court records they have been involved in and if they have been named on any tenancy databases, known as a \u2018blacklist\u2019. Being named on a tenancy database would mean the tenant has a history of not paying rent or causing severe damage to a property,\u201d he said.<\/p>\n Ms Bukowski said landlords can also see how many times an applicant has been searched for on a database, which can be useful.<\/p>\n \u201cIf the prevailing market is such that a tenant should have no problem finding a property, yet they have been searched on a database numerous times in a short period, that suggests they\u2019ve applied for a lot of properties, but have been knocked back. This might ring alarm bells.<\/p>\n \u201cHowever, if the prevailing market is really tight for tenants, so there\u2019s a shortage of available properties, then even good applicants may have to apply to different places to find one. In this situation, multiple searches should not count as a negative for the applicant. It\u2019s just a sign of the times,\u201d she explained.<\/p>\n Landlords are obliged to tell prospective tenants if a check flags an issue, Ms Bukowski said, because if there\u2019s an error or information is out of date, they can address it, either with the previous landlord directly or the database company.<\/p>\n Mr Finn said a poor check doesn\u2019t automatically disqualify a tenant. \u201cHowever, they will need to provide documentation to prove otherwise or explain the situation a little better. If the tenant claims that the result of the credit check is false, the tenant will need to make further enquiries themselves.\u201d<\/p>\n<\/div>\n Realestate au <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Can landlords run credit checks?<\/h2>\n
\n<\/div>\nWhy do landlords run credit checks?<\/h2>\n
Do landlords run \u201csoft\u201d or \u201chard\u201d credit checks?<\/h2>\n
\n<\/div>\nWhat is included in a credit check?<\/h2>\n
More from Guides<\/h3>\n
Can tenants object to the result of a credit check?<\/h2>\n