Simple, Effective Screening for Better Tenants in Nevada

Nevada 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

Nevada Background Checks

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

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 increasing throughout the country. According to data from Snappt, 85% of landlords and property managers experienced rental fraud in 2020. If a tenant lies on their rental application or submits fraudulent documents in Nevada, a credit check can uncover the truth before you allow the tenant to occupy your property. 

1. Avoid future evictions 

Evicting a tenant in Nevada is a long and expensive process, often taking one to two months and costing thousands and thousands of dollars. Thus, you want to do your best to avoid this outcome and background checks help immensely. Additionally — because tenants with a previous eviction are more likely to be evicted again — understanding eviction history can be helpful for avoiding turnover. 

1. Learn about the existence or nature of illegal activity 

It’s also important to run criminal background checks in Nevada. You want to make sure you’re not putting other residents or your property in danger. And, while landlords cannot have a blanket policy for denying convicts, certain crimes (like sex offenses) restrict convicts from certain housing options and are valid reasons to deny a tenant. There may be reasons related to criminal records to deny an applicant, so checking this background matters. 

What do Background Checks in Nevada Cost?

Background checks are relatively affordable across the U.S., but costs vary depending on the area searched and the level of information requested. Searching national records typically costs between $13-60 per person, while searching an individual state’s records like Nevada usually costs between $10 and $30 per person (law enforcement agency Nevada State Police provide reports). County records, which tend to have more accurate and up to date criminal history data, typically cost $16-$25 per person per county checked. You can learn more about the different types of background checks in this article on the topic. 

Which Laws Apply to Nevada Background Checks?

Nevada background checks cannot be used by anyone for any purpose. Due to fair housing protections, the use of credit reports and criminal background checks is restricted. A criminal background check Nevada considers compliant must adhere to federal and Nevada law. 

Title VII of the Civil Rights Act of 1964  

This Act prohibits employment discrimination against job applicants and employees in protected groups. It also applies to people whose background checks show criminal convictions in the sense that employers need to individually determine if the criminal conviction directly impacts the specific role they applied for. 

Senate Bill No. 143 

This bill passed through the Senate in June of 2023 and would make it illegal for Nevada landlords to ask potential tenants about their criminal record or deny them housing because of it. There would still be certain exceptions regarding violent and sexual crimes. 

Expunging Records 

Nevada is different from most states when it comes to expunging records because it doesn’t have an expungement law. 

That said, the law in NRS 179.245 allows people to petition for sealing records following a conviction. Let’s look at more details below: 

• Class A felonies, residential burglaries, and crimes of violence: Ten years following the person’s discharge from probation or parole or release from incarceration 
• Class B felonies: Five years 
• Class E felonies: Two years  
• Gross misdemeanors: Two years 
• Other misdemeanors not involving domestic violence: One year 
• Domestic violence: Seven years 

This law doesn’t apply to those convicted of sex crimes, home invasions with deadly weapons, vehicular homicides, vehicular assaults, and felony DUIs.  

A petition within the criminal justice system doesn’t guarantee approval. The court will hold a hearing to decide and, if approved, sealed records cannot be reported on background checks. 

Credit Checks 

Per NRS 613.570, Nevada employers typically cannot take adverse action against applicants regarding their credit reports. The exceptions to this are as follows: 

• If the employer is required by state or federal laws, which is relevant for specific industries like financial institutions. 
• If the employer has reason to believe that the applicant engaged in illegal activity. 
• If the employer believes information on the credit report is directly related to the specific role. 

Adverse Actions 

If you decide to deny an applicant, it’s critical to know rules and regulations regarding rejecting potential renters. 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. 

Know Nevada Background Check Laws 

Before you run a background check in Nevada, be sure you’re aware of the state and federal laws that apply to their use. Keep in mind that while all Nevada 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 running a background check. 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 Nevada 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 criminal history report 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. Nevada doesn’t have any additional notable laws related to these rules. 

 

Nevada has additional restrictions related to lookback periods for records: 

 

• Bankruptcies: Ten years 
• Civil lawsuits and judgments: Seven years 
• Criminal history that isn’t convictions: Seven years 

Nevada’s state law doesn’t have a salary threshold like the FCRA, which means these restrictions apply to all pre employment background checks irrespective of the $75,000 amount (or any amount for that matter). 

The FCRA’s limitations don’t apply to employment background, education history, and other pertinent background information (along with criminal convictions). 

How to Run Background Checks in Nevada?

It’s important to know the background check process in Nevada. Most people either conduct a DIY background check or use a third-party provider.  

If you run a DIY background check, you should obtain criminal history reports from the Nevada State Police. You’ll also want to contact an applicant’s former landlords and employers, obtain a credit report (Equifax, Experian, and TransUnion are the three major credit reporting agencies that compile credit information), 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 extremely risky, though, because it’s easier to run afoul of relevant laws inadvertently (unless you’re very well-versed in the law). 

For expediency, more comprehensive background checks, and the peace of mind that you’re working with a company abiding by laws, a better option for most landlords is hiring a third-party provider. You can select the kind of reporting you need and let the third-party take care of the collection and reporting process, which saves you substantial time and effort. 

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.