Simple, Effective Screening for Better Tenants in Rhode Island

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 also 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? 

Background checks typically consist of a credit report, criminal history, income verification, eviction history, and a rental application. 

Credit Report

Aside from a lease agreement, a tenant credit report 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 

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 have 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 can be helpful).  

Criminal History

Wide-sweeping national databases, more narrow specific state databases, and granular county records are the main elements of most criminal history reports. 

Income Verification

There are several ways to verify income. Let’s look at some of the most common here:  

• • 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. 

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. 

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:  

• • Basic Contact Information: Think entire legal name, cell phone number, email address, etc. 
  • Current and Former Renting Experience: Four to five years back is typically plenty. 
  • 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 a Rhode Island Background Check? 

Background checks in general are utilized by a variety of groups: landlords, employers, lenders, licensing agencies, government agencies, etc. They 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, a RI background check is needed to: 

• Protect the safety and property of other tenants 

• Reduce tenant turnover 

• Minimize legal liability and gain insight into relevant criminal history 

• 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 

Rhode Island Background Checks 

Landlords in Rhode Island should run a background check on potential tenants as a precaution and general policy. Here are three reasons to run a Rhode Island 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 on the rise throughout the country. According to data from Snappt, 85% of landlords and property managers report having experienced rental fraud in 2020. If a tenant lies on their rental application or submits fraudulent documents in Rhode Island, a credit check can uncover the truth before you allow the tenant to occupy your property. 

2. Avoid future evictions 

Running a tenant’s eviction history in Rhode Island can also help you avoid evictions for nonpayment or criminal activity. In 2023 (based on Eviction Lab data), Providence was keeping up with Boston’s eviction filing numbers. Providence is about 1/6th the size of the larger city, so that puts it into perspective.  

Evictions in Rhode Island are long and expensive processes, often taking one to four months for the full process. Because tenants with a previous eviction are more likely to be evicted again, understanding eviction history is essential for avoiding turnover. 

3. Learn about the existence or nature of illegal activity 

It’s also important to run criminal background checks in Rhode Island. Per the Rhode Island Department of Corrections, the three-year recidivism rate is 50%, which is high in the U.S. 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 can also be other criminal history-related reasons to deny an applicant, so checking criminal records matters. 

How Much Do Criminal Background Checks in Rhode Island Cost? 

Background checks are relatively affordable across the U.S., but their costs vary depending on the area searched and the level of information requested. Searching national records typically costs between $13-60 per person (The Bureau of Criminal Identification and Investigation charges $35 per national background check), while searching an individual state’s records like Rhode Island costs between $10 and $25 per person. 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 the different types of background checks in this article on the topic. 

Which Laws Apply to Rhode Island Background Checks? 

Rhode Island 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 RI considers compliant must adhere to state laws. 

Now let’s look at some specific Rhode Island state laws that relate to background checks: 

R.I. Gen. Laws § 34-18-59 

In January 2024, these laws went into effect. This legislation limits the kind and amount of fees that landlords, property managers, and rental agents can charge rental applicants. 

Landlords may ask a tenant to provide a criminal background check (BCI and a credit report) issued within 90 days before the date of the application. If the tenant does not provide current documents, the landlord can charge the applicant the exact cost of a criminal background check and credit report (nothing additional). The landlord should then provide a copy of the report(s) for applicants. 

None of this prevents a landlord or property manager from getting an independent background check or credit report at their own expense, if they so choose. 

No Arrest Inquiries 

Per 28 R.I. Gen. Laws § 28-5-7, employers may not ask applicants about arrests on applications or in job interviews. 

Expunged Records 

Citizens of Rhode Island who petition for expungement of criminal records and receive that don’t have to divulge this information to potential employers. Per 12 R.I. Gen. Laws § 12-1.3-4 consumer reporting agencies and other custodians of expunged records are also prohibited from disclosing said records. 

Statewide “Ban-the-Box” Law 

Rhode Island has a state-wide “ban-the-box” law that prevents private and public sector employers from asking about prior convictions or arrests during pre employment background checks (e.g., applications, etc.) before applicants get to the interviewing stage (there are exceptions to this for certain kinds of Rhode Island employers, though). 

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 Rhode Island Background Check Laws 

Before you run a background check in Rhode Island, be sure you’re aware of the state and federal laws that apply to their use. Keep in mind that while all Rhode Island 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 Does a Background Check Go in Rhode Island? 

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 Federal 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. Rhode Island is a a state that does take things further at the local level. 

There aren’t any notable state laws regarding these stipulations in Rhode Island. Be sure to check your local and county laws, though. 

How to Run Background Checks in Rhode Island 

When you need to conduct background checks in Rhode Island, most people either conduct a DIY background check or use a third-party provider. If you run a DIY background check, you should probably request national background checks from the BCI in Rhode Island, 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 or relevant laws inadvertently (unless you’re very well-versed in the law).  

For expediency and the peace of mind that you’re working with a company abiding by laws, it’s 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 Experian 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.