Creating a Letter of Authorization to Run a Credit Check on Potential Tenants

As a landlord, you will likely want to run a credit check on your potential tenants. In order to do so, you will need to secure permission in writing, which will require a carefully crafted authorization form. This is also another opportunity to make sure you have all of the information necessary from the potential tenant to do so successfully.

It is critical to understand you must run every applicant’s information in the exact same manner, and maintain the same criteria when evaluating potential tenants. If favoritism is shown, it is possible it could become an issue of discrimination. In order to make this simpler, make sure you setup an account with one credit check company, and include that information in your authorization letter.

At the beginning of the letter, use a section to collect any necessary personal information from the potential tenant in order to run the credit check. This will likely include the person’s name, date of birth, current address, and social security number. If the person has not been at their current address long, you may also wish to get information regarding their previous address.

Within the letter, you will need a basic statement covering the right to run the credit check. This statement will need to be written from the potential tenant’s perspective, meaning it will likely start with “I/we” followed by an explanation of what is being authorized, and for what the returned information will be used. An example of such a statement may be as follows:

I/we authorize (you, the landlord) to run a credit check as part of the potential tenant application and screening process.

Generally, very little else will be required in that statement. You can choose to include information regarding what the returned credit check will be used to evaluate. If this credit check will not be processed in the near future, say within the next 30 days, you may want to include a statement regarding how long the authorization should be considered valid.

This may apply more in situations where you are uncertain as to when the next vacancy may occur, and the tenant is choosing to apply should a property come open. You can further include information on how a potential tenant can rescind permission if the check has not yet been run. Be sure the tenant has the opportunity to read the statement prior to signing the document.

Below the statement will be a section for the tenant to sign and date. They will need to sign the document as it would appear on any other official document, such as their identification card or driver’s license. The date will also need to be clear, including the day, month, and year it was signed.

Once all of this information is complete, you should have everything you need to run the credit check. Be sure to keep a copy of the authorization with the credit report for your records. Retain these records for your protection.