How Instant Rental Verification Transforms Tenant Screening

Traditionally, the leasing process has been manual and time-consuming. It often requires prospective tenants and property managers to meet in person, make copies of documents, and then wait 5-7 days for the verification process to be completed. More recently, tenant screening platforms have sped up the process, but the data collection process is often opaque and may use erroneous or outdated data that renters have no way to refute.  

Innovations in the fintech industry are accelerating the leasing verification process by giving proptech companies and property managers direct access to information about applicants' income, identity, and overall risk. This offers benefits to both businesses and consumers. Below, we'll explore four benefits of leveraging fintech for instant rental verifications.

Speed up application and tenant income verification

When performed manually, the tenant application process can take days or even weeks. Prospective tenants have to gather paper documents which leasing agents must then verify—all while units sit empty. If some documents aren't accepted, the applicant may have to return home and bring new documents on a different day. 

The average rental is vacant for 32 days between rentals, due in part to how long it can take to process applications. Thanks to fintech solutions, the application and income verification process is now simple and fast. In most cases, income can be verified nearly instantly with tools that connect bank accounts for income and identity verification. This helps renters get into homes faster and reduces the amount of time properties sit empty. 

Reduce fraud with automated tenant screening

In addition to being time-consuming, the rental application process is also rife with fraud, as bad actors may alter documentation that impacts the rental decision. 1 in 8 rental applications today are fraudulently altered.

Instant identity verification helps reduce the risk of fraud by providing rental companies with fast and reliable identity verification. Instant identity verification works by comparing uploaded documents (such as a driver's license) with trusted databases and government records. Additionally, using selfie identity verification can reduce the risk of synthetic identity theft and improve Anti-Money Laundering (AML) compliance. 

Verifying income through fintech solutions also helps reduce the risk of fraud by providing more reliable and accurate income information. When property managers can view bank and cashflow data, they can ensure applicants' reported income matches what they earn and put in the bank. This dramatically reduces the risk that an applicant will use a forged document to get approved for a rental property.

By leveraging both instant ID and income verification, property managers and property technology (proptech) companies can reduce the risk of fraud by ensuring the information they collect is accurate.

Expanding rental access

Credit scores have traditionally been the gold standard when screening tenants' financial situations. However, they offer a limited view of prospective tenants’ financial health. Oftentimes, applicants with thin or no credit scores may not qualify, despite having solid income and a high ability to pay. Evaluating cash flow data provides a more holistic view of an applicant's actual ability to consistently pay rent. 

Take the example of a young person who recently graduated from college to start a new job. They want to move into their own place now that they have a steady income, but only recently opened their first credit card. As a result, they will likely have very low credit which would make them difficult to approve without a co-signer. 

Using cash flow data, the property management company would be able to see that they have solid W2 income, have always paid their utility bills on time, and even earn $600 a month delivering groceries via a gig app. With a more complete picture of the renter's financial situation, the property manager can approve their rental application.

Cash flow data doesn't replace credit scores; rather it offers an additional way to evaluate risk and allows property management companies to make smarter decisions. Checke’s solution increases both the availability and usability of cash flow data by turning complex data into actionable insights. Instead of relying on limited data, like credit scores, property managers and proptech companies can access more comprehensive insights about an applicant's financial health. 

Expanding rental access isn't just good for people looking for a home—it's also good for property owners and managers. Expanding rental access may help more renters qualify for homes, lowering the rental vacancy time.