In this post, you will learn about the importance of reviewing a rental application thoroughly, focusing on a renter’s credit history as well as criminal background and eviction reports. You'll discover how Clara can help in this process, providing a renter-friendly, secure, and transparent platform for all parties. Let's dive in! 🏊‍♀️
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(For an overview of an entire rental application, check out this post)
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Evaluating Credit History 💳
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One of the key factors to consider when assessing a potential renter is their credit history. A credit report offers a detailed overview of a potential renter's financial behavior, including their debt levels, payment history, and credit utilization.
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Understanding a potential tenant's credit history is essential as it can give you an idea of their financial stability and reliability. You should look out for things like multiple late payments, bankruptcy, or a high level of debt compared to income. These could indicate potential issues with the renter’s ability to pay rent regularly and on time. Clara partners with TransUnion to report the following information:
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• Basic Information: The first section of the credit report includes an applicant’s basic identifying information, such as their name, current address, recent employer history, and phone number. Clara verifies this information with Plaid during the identity verification step but this is another way to compare the information provided on their rental application to ensure consistency. Missing or inaccurate personal information can be a red flag.
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• Score Models: This is a numerical rating that reflects the creditworthiness of an individual, provided by TransUnion. It is calculated based on their credit history. A higher score typically indicates a lower risk for lenders or landlords.
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• Derogatory Summary: This section includes a list of negative items, or derogatory marks, that indicate an account is past due or at risk of credit. Here you will see a summary of late payments, charge-offs, missed payments, bankruptcies, collections, and other public reports related to credit history.
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• Credit Profile Tradeline Summary: This summary shows an overview of an applicant’s overall activity. This section is broken into three parts to evaluate factors such as payment history, debt levels, and monthly financial obligations. This summary contains the total number of tradelines, which is the sum of revolving, mortgage, installment, and open accounts.

• Current Delinquencies: These are the debts that the individual is currently late on paying. This can include both minor late payments and serious delinquencies like defaults or bankruptcies. A high number of current delinquencies can indicate financial instability.
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• Amount Delinquencies: This refers to the total amount of money that the individual is currently late on paying. This can give a better sense of the scale of the individual's financial difficulties.
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• Total Credit Lines: This represents the total number of credit accounts or loans that the individual has. It can include credit cards, mortgages, car loans, etc. Having a higher number of credit lines can indicate an individual's ability to manage multiple credit accounts, but it could also indicate potential overextension of credit.
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• Revolving Credit Balance: This is the amount of money an individual currently owes on their revolving credit accounts, such as credit cards. A high revolving credit balance compared to the credit limit can indicate potential financial strain or overuse of credit.
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• Public Records: These are records that are available to the public, such as bankruptcies, tax liens, and judgments. These records can negatively impact an individual's credit score and can indicate significant financial difficulties or legal issues.
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In some cases, a report might come back with No Score. In most cases, that means the does not have any credit history that has been reported in the last six months because there were no accounts or trade balances that were active and being reported on which would generate a credit score further due diligence should be conducted.
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• Score Suppressed: If a renter had information on their credit report that was the product of identity theft, they could have sent a request to the credit bureaus a request for suppression.
• Frozen Credit File: A renter might have frozen their credit report to prevent identity thieves and other fraudsters from opening accounts in their name. The renter can unfreeze their TransUnion report and re-submit.
• Minor: Prospective renter is young, under the age of 16, and has not yet established a credit file.
• Disputed: Under the FCRA, consumers have the right to dispute any information on their credit report that they believe is inaccurate or incomplete. If a consumer believed that there is an error on their credit report, they could have filed a dispute with the credit reporting agency that issued the report.

It's important to remember that a less-than-perfect credit score doesn't always mean the applicant will be a problematic renter. Life circumstances like medical expenses or divorce can impact a person's credit score. Therefore, while credit history provides valuable insights, it's crucial to consider the full picture and evaluate other aspects as well.
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Evaluating Background & Eviction Reports 🗂
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Another key part of tenant screening is taking a look at background and eviction reports. These can give you a helpful peek into a potential renter's previous rental journeys and any past legal hiccups they may have experienced.
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Clara conducts an eviction search, looking for past court actions, unlawful detainers, monetary judgements as well as an extensive criminal history search that searches through more than 200 million records, both at the national and state level. Each background check searches for felonies, sex offenses, wants & warrants, and more.
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An eviction report will let you know if the applicant has had to leave a property in the past. This nugget of information is super important because it can give you a clue about how well a renter might stick to the lease agreement. On the flip side, a background check can shine a light on any criminal history. Depending on what it uncovers and how serious it is, this might be something you'd want to think about.
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Both these reports are crucial in assessing an applicant's suitability as a tenant and should be carefully reviewed as part of the evaluation process.
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How Clara Helps in This Process
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Clara aims to make the process of screening potential renters as efficient and streamlined as possible. To do this, Clara partners with TransUnion to provide a comprehensive credit summary and CIC for Background and Eviction reports. This partnership allows landlords to access all the necessary information in one place, significantly simplifying the decision-making process.
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Equity in the Leasing Process ⚖️

Clara is built with end-to-end transparency in mind, ensuring equity in the leasing process. This means that renters gain direct insight into how they're being evaluated, while landlords get an all-encompassing view of a renter and their background. It's a win-win situation for both parties. 🏆

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Next Steps - Getting Started with Clara 🚀
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Ready to find your next renter? Clara is here to help. With Clara, you can cut your search time, fill your properties faster, and maximize your income. Say goodbye to scattered documents, missing email attachments, and misinformation. Say hello to organized, streamlined, and fully verified renter profiles.

With Clara, finding the ideal renter is no longer like looking for a needle in a haystack. It's more like finding a diamond in the rough. 💎

So, why wait? Start your journey with Clara today and lease with confidence.