San Fernando Valley Property Management

When faced with a bad tenant, landlords have options. The eviction process is a long and drawn out one, but there are steps landlords can take to report a bad tenant to the credit bureaus. Reporting these tenants may not get you the money owed to you, but it will affect the tenant’s credit score, and it will save other landlords from renting to the tenant. You have options when it comes to how you choose to report bad tenants to credit bureaus.

Document any and all missed payments or money owed. If the money owed is due to damage to the rented unit, take and keep photographs. If you have the damage fixed, keep all the receipts to show how much damage was incurred. Have proof that the tenant was notified that if the debt remains unpaid, he will be reported to the credit bureau.

2

Contract a collection agency like the Landlord Protection Agency or Tenant Collection Services to begin collection efforts on your behalf. Provide the company with all information you have regarding the tenant, like name and Social Security number, and have on hand copies of all documents that confirm the debt and previous collection efforts.

3

Choose between a fee-based collection, or opt for a contingency basis. Landlord Protection Agency will work on both a contingency basis, where they take a percentage of the money owed to you, or a flat-fee service where you pay them one fee of $16.95 and if the debt is collected, it will belong to you. Tenant Services charges independent landlords $100 for their collection procedures for up to two tenants. Both companies’ fees include reporting the tenant to the credit bureaus.

4

Report the tenant yourself by enrolling in Apartment Owners Association of California’s Debt Reporting Service, if this option is more attractive to you. This association reports the debt to all three credit bureaus for a flat fee of $12.95 as of 2010, but collection services are not offered.

• Missed payment/money owed records
• Damage photographs
• Tenant’s Social Security number
• Credit bureau/collection agency membership

Tips

• Telling a potential tenant that you report good and bad payment histories to credit bureaus can prevent payment problems.

Warnings

• As the information reported to the credit bureau is damaging to the tenant, it is your legal responsibility to update the information in a timely and accurate fashion. If the debt is paid or cleared in the future, you must update the three credit bureaus with this information.
• Under the Fair Credit Reporting Act, the tenant must be notified of having been reported within five days of the negative report.

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