Background and credit checks are becoming standard in New Zealand when choosing new tenants. There are many reasons why. Some include:
- Insurance cover. Landlords now have to background and credit check tenants prior to them moving in according to new policy changes. This is because insurance sees this as a way to prevent meth-contamination: An occurrence which is expensive if properties end up testing positive.
- Rent arrears. While checking references helps to get a better understanding of who your tenant is, checking their credit history is the best way to know if they will pay rent on time or not.
- Peace of mind. Background and credit checks are a great way to know if you’re making the right decision. A home is a big investment and a report that accumulates years of records from reliable sources can give you the peace of mind that references might not.
Looking at these reasons it becomes apparent that it is important to credit check tenants before handing over the keys to your home. Not only is it now required for insurance cover but it also gives you the go-ahead when making your final decision.
Nowadays, there are many online agencies that provide thorough background and credit checks. Although the only difference in the services might seem like price, there are several other things you should take into account when choosing who should credit check your tenants.
Below, we look at three of the most popular websites for tenant background and credit checks in New Zealand and devise an easy-to-read table of what each offers. Read it to inform your next credit checking decision.
|Credit checking agency||Pros||Cons|
Although it might seem intrusive to vet your tenants prior to them moving into your home, it only takes one of the online services above to save yourself some peace of mind when you do find a great potential tenant. Remember, you do need to have their permission and it is wise to tell your tenant that the background and credit checks are simply an extra precaution to assist you with your final decision.
What to look out for when choosing who to credit check with?
Now that you know where you can go to get your tenant checks, here are some things you should look out for when choosing which one to go to:
New Zealand has three credit reporting companies and as set out on the Government website, these are Illion, Equifax, and Centrix. Although each agency searches extensive records of data when running their reports, they also have their own individual sets of data that differ from one another. This means that what one agency might pick up in its reports, another might miss. When choosing who should conduct your tenant checks it is wise to see:
- How many agencies the report will search.
- Which agencies the report will search.
- Whether you are able to get a report that searches all three of New Zealand’s credit reporting companies.
Many tenant checks will search at least two of NZ’s credit agencies, and those who only search one should probably be avoided. This is purely for safety reasons and to avoid having a report that misses something vital. Two services which do search all three agencies are Doublecheck and TenantCheck. Although it might seem expensive to credit check all of your tenants and to use services which search all three agencies, you can’t put a price on safety when it comes to choosing the people who occupy your house.
When choosing someone to credit and background check your tenants, you’ll also want to see which sources they search as this will indicate what results will be in your report. It is good to know because some sources are more important than others when you are considering a tenant for your home. When looking for tenant checks, you will want to make sure that these sources are definitely included:
- Tenancy Tribunal records
- Court records
- Media records
Tenancy Tribunal records are important as they will show whether your tenant has had disputes with a landlord before. Although this could be perceived as negative if you do see a result for this section, remember to always read the entire case as you need to understand the exact circumstances. Court records are helpful for showing whether your prospective tenant has outstanding fines or other convictions and media records are useful as news sites and other media sources might show information that social pages and government databases do not.
Most tenant checking websites should provide a list of the sources they search. Just remember to always read the results and open the links that the reports might provide to ensure you:
- don’t miss anything yourself and
- have a good understanding of why something showed.
After seeing a concise comparison of the sources searched, pricing, and records that each of these services uses, we hope you now feel confident in choosing who is going to vet your next tenants!
Featured image from Unsplash