Co-Signer Screening: What Landlords Check and Why

Answer

Intro: Screening a co-signer (guarantor) helps landlords reduce risk when an applicant lacks credit or sufficient income. A good process protects your property and treats applicants fairly. This answer summarizes common landlord checks, documentation to request, and practical safeguards landlords use.

Main steps

• Confirm identity. Collect government ID and Social Security number (or ITIN) and verify name, date of birth, and current address. Use the same identity steps you require of tenants to prevent fraud.
• Run a credit check. Obtain written permission and run a consumer credit report—observe FCRA rules. Look for on-time payment history, outstanding debt, recent derogatory items, and a credit score benchmark (many landlords prefer a score of 650+, but thresholds vary).
• Verify income and employment. Require recent pay stubs, W-2s or tax returns for self-employed guarantors. A common rule of thumb: guarantor gross income of 3–4× the monthly rent. Document employer contact and job stability.
• Check rental and eviction history. Ask for references from prior landlords and search court records for evictions or judgments against the guarantor.
• Review bankruptcies and public records. Bankruptcy, liens or judgments raise risk—decide in advance which conditions disqualify a guarantor.
• Use a clear guaranty agreement. Have the guarantor sign a written guaranty or cosigner addendum that specifies the scope (limited vs. continuing), duration, and remedies for nonpayment. Keep a signed copy with the lease.
• Stay consistent and fair. Apply the same screening criteria to all guarantors to avoid discrimination claims under fair housing laws.
• Protect privacy. Store sensitive documents securely, limit access, and follow local rules on retention and disposal.

Practical tips
If an in-state guarantor is unavailable, consider third-party guarantor services or require larger security deposits/prepaid rent. Always disclose any screening fees and obtain written consent before running credit or background reports. For complex cases or unusual guaranty language, it’s advisable to consult a licensed attorney.

Final note: Effective co-signer screening balances risk reduction with fairness. Keep consistent standards, document every step, and secure written commitments so you can enforce obligations if the tenant defaults.