There are many good reasons why you should, 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 quickly 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.
Who can provide a credit check?
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 be taking into account when choosing who should credit check your tenants.
Below, we look at four of the most popular websites for tenant background and credit checks in New Zealand and separate their differences into what they check, what they don’t check, and how much each cost.
The four services we look at are TenantCheck, Doublecheck, Good tenant, and Namecheck. All of these services are available online and allow landlords to easily conduct background and credit checks on their tenants.
What they check
Tenantcheck check every credit agency in New Zealand: “The most comprehensive background check in NZ.”
TINZ or illion Tenancy – New Zealand’s largest tenancy database.
Over 25 sources including Tenancy Tribunal, NZ police, and more.
Over 10 years of records.
NZ’s leading tenancy background checking agency, Tenancy Check.
The tenant’s licence and verifies this.
What they don’t check
Nothing! TenantCheck searches every source they can to compile tenant reports.
Cost
$15 for a basic background check.
$89.99 for one of the most comprehensive background and credit checks in NZ.
What they check
Every credit agency in New Zealand.
Over 25 sources including Tenancy Tribunal, NZ police, and more.
Over 10 years of records.
NZ’s leading tenancy background checking agency, Tenancy Check.
The tenant’s licence and verifies this.
What they don’t check
TINZ or illion Tenancy – New Zealand’s largest tenancy database.
Cost
$4.99* for background checks
$30 for a Premium credit check which searches two credit sources.
$45 for the Ultimate check which searches all of NZ’s credit agencies.
*This price has been updated as of 17 March 2020
What they check
Two credit agencies in New Zealand.
Over 25 sources including Tenancy Tribunal, NZ police, and more.
Over 10 years of records.
NZ’s leading tenancy background checking agency, Tenancy Check.
The tenant’s licence and verifies this.
What they don’t check
Illion credit agency.
TINZ or illion Tenancy – New Zealand’s largest tenancy database.
Cost
$59.99 for a credit check.
$149.99 for two credit checks and interviews with references
*Pricing updated 6 October 2020
What they check
Over 5 years of records.
Does not state which sources of credit they search.
What they don’t check
Does not verify the tenant’s licence. Must pay an extra $15 for this.
TINZ or illion Tenancy – New Zealand’s largest tenancy database.
Cost
Credit check costs $30 without a background check.
Extra $15 to verify tenant licence.
You can purchase package deals for a discounted rate.
It might seem excessive to vet your tenants prior to them moving into your home, but 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 should I 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:
Credit-checking agencies
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 TenantCheck and Doublecheck. 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.
Credit check information sources
When choosing someone to credit and background check your tenants, you’ll also want to see which sources they search. 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. 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
have a good understanding of why something showed.
So who should I choose?
Its up to you! The most comprehensive checking service we found was Tenantcheck. The cheapest on offer is Doublecheck for their basic checking service.
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!
