One Bad Tenant Can Cost You Thousands—But Screening Them Right Can Save You

A tenant who pays late, damages the unit, or ignores your lease terms isn’t just frustrating—they’re expensive. If you’ve ever had to navigate an eviction or deal with unpaid rent, you know how crucial the tenant screening process is to protecting your property and your peace of mind.

The good news? You don’t need to rely on gut instinct. Today’s tenant screening services provide data-driven insights on everything from credit score to criminal record and eviction history—all legally and efficiently.

Here’s how to screen prospective tenants properly—without crossing any lines or missing key red flags.

1. Start with a Legally-Compliant Rental Application

Why it matters: A good rental application sets the tone for the rest of your tenant screening process. It also protects you legally by standardizing how you gather information.

Your application should request:

• Full name and Social Security number

• Previous addresses and landlord references

• Employment history and income verification

• Permission to run a credit and background check

Compliance tip: Avoid asking questions that could relate to a protected class (such as family status or disability), as defined by federal housing laws. Always use the same application for every potential tenant to ensure fairness and consistency.

2. Use a Professional Tenant Screening Service

Why it matters: DIY background checks can miss key data and may even put you at legal risk. Reputable tenant screening services bundle everything into a single report so you can make an informed, fair decision.

What you should look for in a screening report:

• Credit report and credit score

• Criminal record

• Eviction history

• Income-to-rent ratio

• Address verification

Popular tenant screening services include:

• TransUnion SmartMove

• RentSpree

• MyRental

• TurboTenant

Psychological benefit: Screening reports give you a sense of control and confidence. No guessing. Just data.

3. Evaluate Employment and Income Carefully

Why it matters: Even a tenant with a good credit score can fall behind on rent if their income isn’t steady or sufficient.

What to verify:

• Length and stability of employment

• Monthly income (aim for 2.5–3x the rent)

• Employer contact for confirmation

Red flag: A gap in employment history or unverifiable income can signal risk. Always cross-check with bank statements or pay stubs when available.

4. Check the Tenant’s Rental History (And Actually Call References)

Why it matters: A clean credit report doesn’t tell you if someone left holes in the wall or paid rent two weeks late every month.

Ask previous landlords:

• Did they pay rent on time?

• Did they maintain the unit well?

• Would you rent to them again?

Tip for better responses: When contacting references, say “I’m considering renting to [Name]”—rather than “Can you tell me about [Name]?” This simple framing gets more honest answers.

5. Understand What You Can and Can’t Use in Your Decision

Why it matters: Fair housing violations are expensive and damaging. While credit and background checks are fair game, rejecting a tenant for reasons related to a protected class is not.

Common protected classes include:

• Race, color, national origin

• Religion

• Sex or gender identity

• Disability

• Familial status (e.g., having children)

Reminder: Always base your decision on consistent, documented criteria—never on assumptions or preferences.

6. Know When to Say No (and How to Say It)

Why it matters: If you decide to deny a prospective tenant, you are legally required to send an adverse action notice if the decision was based on a tenant background check or credit report.

What to include in your denial letter:

• Name of the screening agency used

• Explanation of their right to dispute the results

• Contact details for the agency

Compliance tip: Don’t explain the decision in personal terms. Simply cite the screening criteria and the report that did not meet it.

Be the Property Owner Who Screens Smart, Not Sorry

Tenant issues are preventable—but only if you screen thoroughly and fairly. With the right process in place, you’ll avoid bad leases, reduce turnover, and attract better renters for years to come.

Recap:

• Use a standardized rental application for every potential tenant

• Hire a professional tenant screening service

• Evaluate income, history, and references

• Follow housing laws to avoid legal risk

• Send proper notices if rejecting a tenant

Want Help Setting Up a Reliable Screening Process?

At Coastline Equity, we help property managers and property owners implement tenant screening systems that save time and reduce stress. Let us walk you through your options and help you avoid costly mistakes.

📞 Call us today at (310) 373-0602 to protect your rentals before the next lease is signed.