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Frequently Asked Questions 

1) Do I have to be a member or can any landlord or property manager use this service? 

If you are a landlord or a property manager anywhere in the United States, you can sign up and use our services. However, we do require an onsite inspection to insure that that you have a secure means of storing the credit reports and other reports. The licensed inspector will look for, and you are required to have a locked filing cabinet (s), password protected computer and a paper shredder.

In addition the inspector will be required to insure that you are running an operating an unauthorized business. You will be asked to present your business license and or show proof that you are a landlord. The fee for this inspection is $99 and it is non refundable. One you have been approved, you will then be able to begin running your tenant background screening, please read and become familiar with the Terms of Use and Privacy Policy.

2) Can I charge the prospective tenant for running a background check?

This is a common practice among landlords and property managers, this charge is usually referred to as the tenant screening application fee. Which will cover your tenant background screening. Depending on your background check needs, will determine the tenant screening application fee. This fee is usually collected before you do the background screening and is non refundable to the prospective tenant. Please make sure this is in writing and signed by your prospective tenant. If you have any questions on this matter please consult your attorney. 

3) What happens after I've run a credit report on a prospective tenant and it comes back with negative information, can I decide weather or not to rent to the perspective?

You should have clear policies on what is acceptable and what is not. Once you have decided (you should check your state laws as to an appropriate score) then that should be your bar. If that prospective does not met that bar then you should not rent to that prospective. A credit score of 680 or higher is considered "fair or better" and generally the excepted score. If today you chose to accept a tenant with a low score and the next day you deny someone for having the same score or higher you go be getting into an area of discrimination. One way to avoid making a costly mistake, is to use our InstaScreen Tenant Scorecard. If you turn down a prospective tenant you must give that applicant a Denial Notice in writing and keep a copy in your file to document why you have turned down the prospective in order to be in full compliance with the Fair Housing Laws  and the Fair Credit Reporting Act. A prospective tenant who has been denied may within 60 days of the date of the report, request a copy of the rental report and upon receiving this report they have the right to submit a 100-word statement regarding any disputed information.

4) What is a credit score?

A credit score in the United States is a number representing the creditworthiness of a person, the likelihood that person will pay his or her debts. Lenders, such as banks and credit card companies, use credit scores to evaluate the potential risk posed by lending money to consumers. Widespread use of credit scores has made credit more widely available and cheaper for consumers. The best-known and most widely used credit score model in the United States, the FICO score is calculated statistically, with information from a consumer's credit files (i.e., Payment history, amount owed, length of credit history, new credit, types of credit in use, etc.). It provides a snapshot of risk that banks and other institutions use to help make lending decisions. Applicants with higher FICO scores may be offered better interest rates on mortgages or automobile loans.

Credit scores are designed to measure the risk of default by taking into account various factors in a person's financial history. Although the exact formulas for calculating credit scores are secret, FICO has disclosed the following components: 35% — Payment history – Late payments on bills, such as a mortgage, credit card or automobile loan, can cause a FICO score to drop. Paying bills on time will improve your FICO score. 30% — Credit utilization – The ratio of current revolving debt (such as credit card balances) to the total available revolving credit or credit limit. You can improve your FICO scores by paying off debt and lowering the credit utilization ratio.

Alternatively, applying for and receiving the credit limit increase will also drive down the utilization ratio. Closing of existing revolving accounts will typically adversely affect this ratio and therefore have a negative impact on their FICO score. 15% — Length of credit history – As your credit history ages it can have a positive impact on their FICO score. 10% — Types of credit used (installment, revolving, consumer finance, mortgage) – You can benefit by having a history of managing different types of credit. 10% — Recent search for credit – Credit inquiries, which occur when you are seeking new credit, can hurt your score. Individuals shopping for a mortgage or auto loan over a short period will likely not experience a decrease in their scores as a result of these types of inquiries, however. While all credit inquiries are recorded and displayed on your credit report for a period of time, credit inquiries that were made yourself (to check your credit), by your employer (for employee verification) or by companies initiating prescreened offers of credit or insurance do not have any impact on your credit score. 

There are other special factors which can weigh on the FICO score. Any money owed because of a court judgment, tax lien, etc. carry an additional negative penalty, especially when recent. Having one or more consumer finance credit accounts may also be a negative. FICO score range - A FICO score is between 300 and 850, exhibiting a left-skewed distribution with 60% of scores near the right between 650 and 799. According to FICO the median score is 723. Each individual actually has three credit scores for the FICO scoring model because the three national credit bureaus, Experian, Equifax and TransUnion, each has its own database. Data about an individual consumer can vary from bureau to bureau. These studies point out that people with higher scores have fewer claims. Studies also indicate that the majority of insureds pay less in insurance through the use of scores.

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