Screening Applicants with Frozen Credit
When screening applicants you should always do a background and credit check. You should never place a tenant without first completing this step. Occasionally, when preforming a credit check on an applicant, the credit check will come back “NA”. Usually, this happens because the applicant hasn’t built up credit yet. This is typical with college students or individuals recently graduated from high school. In these situations, you might require a co-signer or a double deposit, depending on what you’re comfort with.
However, some tenants with bad credit are using the tactic of freezing their credit to circumvent the screening process. The three credit reporting agencies (Equifax, Experian, and TransUnion) allow individuals to freeze their credit to avoid identity theft. When an individual’s credit is frozen their credit check comes back as “NA”. The applicant with credit problems is trying to circumvent the screening process hoping you assume they simply don’t have credit yet–when in reality they may have several collections or other delinquencies.
A way to deal with this problem is to simply add a question to your application that says “Is your credit currently frozen? Yes or no. If yes, please unfreeze your credit before applying.” This way, if they mark on the application that their credit is not frozen, and it turns out that it is, you can legally deny their application for providing false information.