How Do I Report Bad Tenants to Credit Bureaus?

report tenants to credit bureau

Q. How Can I Report Bad Tenants to Credit Bureaus?

Answer:

Renting out your property to tenants is supposed to bring in a steady income to assist in alleviating your financial concerns. However, when tenants do not pay on time or delay payment of rent to such an extent that it begins to cause problems for you, they are officially bad tenants.

We talked about the best ways of dealing with bad tenants in a previous post. Today, let’s take a look at how you can report late-paying tenants to credit bureaus. Reporting tenants may not always result in getting you your owed rent, but it does make sure that the tenants do not cause similar problems for future landlords who will easily spot this issue in a credit check.

Pre-requisites for Reporting a Tenant

Landlord Membership with Credit Bureaus

Before you can report a tenant to any of the three major credit bureaus, you first need to make sure you are a member. For example, Experian offers individual landlords the opportunity to report all tenant payments so they can be added to a tenant’s credit history. You can choose to be a member of all three bureaus or just one depending on your preference. Landlords also have many others benefits by becoming members of credit bureaus which include the ability to let the collection agencies collect your rent on your behalf. This is then automatically added to the tenant’s credit history.

Additionally, when your tenants know that every late payment will be directly reported in their credit history, it will serve as an incentive to pay you on time.

Records of all Communication

All communication and transactions with your tenants should be duly recorded and documented. You must have copies of all letters, e-mails or notices you may have sent to the tenant along with their replies, if any. This is important because credit bureaus will not just take your word for it when you report a tenant for missed payments; you must have proof to substantiate your claims.

Evict a Bad Tenant

Eviction is a long and tedious process however; it is also a sure way of getting your bad tenants reported to the credit bureaus. In this scenario, you will not need to report the tenant but once the court orders an eviction, the record will automatically go into their credit history.

Sue the Tenants

This is a costly method but is very effective in getting bad tenants to pay up. A court proceeding will also eventually end up being reflected on the tenant’s credit history making it very difficult for them scam any future landlords.

Remember that if you decide to sign up to report tenant’s payments, it is also your responsibility to report when they have paid you.

Although a landlord is not required to report a tenant’s rent payments by Federal laws, choosing to do so can help you and other landlords in choosing a suitable and reliable tenant for rental properties.

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