Simple, Effective Screening for Better Tenants in Alaska

Alaska Background Checks

Background checks are a vital part of thorough tenant screening. Every landlord needs to know the history of every applicant. Background checks give you a good idea of whether someone makes payment on time, stays out of massive debt, has a criminal past, and a lot more.

Background checks reduce the chances of tenant turnover, protect you from liability, and help you and other tenants remain safe.

In this article, we’ll help you understand what background checks consist of, how to ensure you get the information you need, and what you need to know about your state’s rules regarding them. 

What are Background Checks?

1. Credit Report: Aside from a lease agreement, a tenant credit might be the most crucial document for a landlord to understand. This document is one of the best ways to determine whether someone will pay on time and in full. Here are the main components of a credit report:
   • Basic information like former names/aliases, current and previous addresses, etc.
   • Fraud indicators like invalid phone numbers or phony social security numbers
   • Tradeline summaries that give a snapshot of an applicant’s active accounts
   • Inquiries that show a list of companies who viewed an applicant’s credit file over the last two years
   • Credit/resident score
   • Winter weather damage

   The credit score and the resident score are key. A credit score is a numerical value anywhere from 300-850 that helps illuminate an applicant’s creditworthiness. If an applicant has a score of 500 or less, proceed with caution. Most reliable tenants will ave a score above 560. A resident score is similar to a credit score, but more directly reflects someone’s reliability as a tenant. Both scores are proprietary, so the exact formulas aren’t available to the public. That said, resident scores typically include a recommendation on whether to accept an applicant or not (this shouldn’t be treated as gospel obviously, but it’s helpful).

2. Criminal History: Wide-sweeping national databases, more narrow specific state databases, and granular county records are the main elements of most criminal history reports.
3. Income Verification: There are several ways to verify income. Let’s look at some of the most common here: whether someone will pay on time and in full. Here are the main components of a credit report:
   • Pay Stubs: Paychecks are the most common way to verify income. Anyone with full-time or part-time employment can make copies of paychecks and send them to you.
   • Yearly Tax Returns: A federal tax return is another option to obtain proof of income. This is often an excellent option because it’s an official legal document, so it’s difficult to fake.
   • W-2 Tax Form: These forms show employer’s withholding payroll taxes from workers’ earnings. This is another good option because it’s a document directly from an employer.
   • Bank Statements: This method is especially effective for self-employed applicants because they won’t have regular pay stubs like those who work for traditional businesses.

   Important Note: Innago’s new income verification feature, which you can learn more about here, makes it easier than ever to ensure your tenants have the necessary funds to pay you

4. Eviction History: Except in cases where overdue rent went to collections or a previous landlord reports late payments, credit reports don’t usually show evictions.  Federal law typically prevents evictions from being shown on a background check after seven years, but this figure varies by state
   If you cannot see an applicant’s eviction history on a credit report or obtain the information by contacting their previous landlords, then you may pull an eviction report. However, certain states have restrictions on different kinds of reports (we’ll address those if they’re relevant later in this piece).
   Eviction history matters because the cost of an eviction for landlords is often between $4,000 and $7,000 or more. That means that if a tenant was evicted, they likely left their previous landlord with no other choice.
5. Application: A rental application is a preliminary form used to obtain basic information about an applicant and their eligibility. Most applications ask for this information:
   • Landlord References: Contact previous landlords and get their take on applicants. This is a critical step that some landlords skip over. Make sure you’re not one of those landlords.
   • Employment History: You want to know current and former employers and get consent to contact them.
   • Written Permission to Run a Credit Check
   • Legal Disclosures: Here’s a helpful article on what disclosures to include.
   • Additional Inquiries: Be careful here. Make sure you don’t ask questions that violate laws. Only ask about things like pets or smoking. And make sure you’re consistent.

Why Do You Need to Run Background Checks?

Background checks in general are utilized by a variety of groups: landlords, employers, lenders, licensing agencies, government agencies, etc. Tenant screening or employment background checks are run to ensure that a candidate for a job, license, property, or loan is properly qualified and does not have a history of behavior that would interfere with their ability to perform the duties required under contract. Background checks minimize legal liability, protect companies’ assets and current employees, and are sometimes required by clients.

When it comes to landlords, background checks are needed to: 

1. • Protect the safety and property of other tenants
   • Reduce tenant turnover
   • Minimize legal liability
   • Increase the likelihood of on-time rental payments
   • Avoid conflict and crime in the rental community
   • Narrow down applicants for a high-demand property
   • Prevent expensive and lengthy eviction processes

Alaska Background Checks

Landlords in Alaska state should run background checks on potential tenants as a precaution and general policy. Here are three reasons to run background checks in Alaska: 

1. Identify rental application fraud 

Rental application fraud, which occurs when a tenant lies on their application or submits falsified pay stubs, bank statements, etc., is on the rise across the country. In fact, according to recent data from Snappt, 85% of landlords and property managers report having experienced rental fraud in 2020, compared to only 66% the year before. If a tenant lies on their rental application or submits fraudulent documents, a credit check can uncover the truth before you allow the tenant to occupy your property. 

1. Avoid future evictions 

Running a tenant’s eviction history in Alaska can also help you avoid evictions for nonpayment or criminal activity. Although Alaska has one of the lowest eviction filing rates in the U.S., lease violations and evictions can still occur. It’s especially important to run an eviction history check on prospective renters since tenants with previous evictions are more likely to be evicted again. By performing this check on every potential tenant, you can avoid eviction in Alaska and ensure that the applications you do accept make successful tenancies. 

1. Learn about the existence or nature of illegal activity 

In 2022, there were more than 18,600 crimes committed in the state of Alaska, both violent and property related. Although Alaska’s crime rates are lower than other states’, illegal activity can still be a problem for landlords renting out properties to tenants. By running a criminal record background check, you can protect the safety of neighboring tenants, their property, and your own property. 

What do Background Checks in Alaska Cost?

Criminal background checks are relatively affordable across the U.S., but your specific background check cost will vary depending on the area searched and the level of information requested. Searching national court records typically costs between $13-60 per person, while searching an individual state’s records like Alaska costs between $10 and $25 per person (an Alaska criminal background check from the Alaska Department of Public Safety costs $20). County records, which tend to be more accurate and up to date, cost $16-$25 per person per county checked. You can learn more about each of these specific types of background checks in our article on the topic. 

Which Laws Apply to Alaska Background Checks?

An Alaska background check cannot be used by anyone for any purpose. Fair housing protections and employment background check laws, both on the federal and state levels, regulate the use of credit reports and criminal background checks Alaska considers compliant. 

In Alaska, it is legal to deny a prospective tenant based on the results of their criminal background check results. As of date, Alaska has not adopted any ban-the-box or fair chance licensing reform laws. However, Alaska is still subject to federal regulations like the Fair Credit Reporting Act (FCRA) and Title VII of the Civil Rights Act. These laws implement several restrictions for the use of background checks, in some cases restricting the reporting of crimes that did not result in convictions and/or are more than seven years old (felony and misdemeanor convictions can usually always be reported). Here are a few general rules established by FCRA and Title VII (employment discrimination is enforced by the Equal Employment Opportunity Commission): 

• Credit reports cannot be given to anyone without a legal reason to view them. 
• Companies that report to consumer reporting agencies have a duty to investigate disputed information. 
• Tenants or job applicants must be notified if they were denied housing or employment because of something found on their credit report. (Read this article to review legal reasons for denial and how to abide by the Fair Housing Act. If you deny an applicant based on information in consumer reports, you’ll need to send them an “adverse action” notice. Read more about these notices here.) 
• Employers cannot discriminate against applicants on the basis of race, color, religion, sex, or national origin. 

Before you run a background check in Alaska, be sure you’re aware of the state and federal laws that apply to their use. Keep in mind that while all Alaska counties are subject to state-wide laws and executive orders, some counties may enforce additional regulations. Additionally, you must get written consent from a tenant before viewing Alaska criminal records. Be sure you’re educated on the law in your region and adhere to the HUD’s recommendations.  

How far back do Background Checks in Alaska go?

When you use consumer reports to make tenant decisions, you must comply with the Fair Credit Reporting Act (FCRA). 

Section § 605 – 15 U.S.C. § 1681c of The Fair Credit Reporting Act (FCRA) applies in all 50 states and mandates a seven-year restriction on reporting certain background check information like civil suits, civil judgments, and arrest records (except in certain cases where an employer is hiring for a job with a salary more than $75,000). The FCRA doesn’t have similar timeline restrictions on criminal convictions, but some states restrict reporting conviction information at the state or local level. There are no notable state laws to this nature in Alaska, but individual cities or counties may have additional restrictions. 

How to Run Background Checks in Alaska?

When you need to conduct a background check in Alaska, most people either conduct a DIY background check or use a third-party provider. If you run a DIY background check, your best bet is probably to request Alaska arrest records/criminal histories from the Alaska Department of Safety, contact an applicant’s former landlords and employers, obtain a credit report, verify income, look at the sex offender registry, and ensure you have all the information you need to conduct thorough tenant screening.. DIY checks can be risky, though, because it’s easier to run afoul or relevant laws inadvertently (unless you’re very well-versed in the law).  

The better option is to partner with one of the several available third-party background screening services, who often bundle credit, resident, criminal, and eviction histories together as a package. You can select the kind of reporting you need and let the third-party take care of the collection process. Additionally, state background checks requested from the Alaska court system may not be as accurate as local county records or as far-reaching as national records. 

Background Checks with Innago

At Innago, we’ve partnered with TransUnion SmartMove to help you review background check information and identify high quality applicants. Running a background check through Innago allows you to quickly and easily identify the best applicants and ensure their application information is accurate. Likewise, Innago’s income verification feature helps our users verify reported income by connecting to their bank account, payroll provider, or by uploading documents. 

Disclaimer: This article is for educational purposes only and does not constitute legal advice. We recommend you consult with professional counsel if you have legal questions regarding your specific practices and compliance with relevant laws.