When we get a potential tenant buyer for one of our lease option houses for sale, we have the right to go online and pull someone's credit report. It costs me $12 and it takes a few days to get the information. Another option for us is to turn to my mortgage broker. They pull the credit for me. There is a risk here. Say we send them 100 names and ask for a credit report. They have to get the report for $10 or $12 a piece. Then what happens if none of the tenants move into a property? It could be a lot of wasted time and money. Also this is just preliminary. The mortgage companies are looking for buyers. With our system of bringing them in on a lease and asking them to buy, it could be a year before the mortgage company gets any business.

I can pull their credit online but this is once they sign off and give me the ok. Now I have reservations about spending money to pull a credit report on everybody. They say their credit is good and if we think they're right we do it.

Most of the people coming in already know where they're at. If they know their credit isn't good then I don't pay the money. I usually decided that this is just a cost that I am going to eat.

There are a few things we look at when we do credit checks. We look at past employment and whether they are working currently. We look at past landlords. We look at their income, criminal record and their credit. That's typically what I check on a rental. If I find out that they have been kicking in bathroom doors at their property. I don't want them. I don't want anyone kicking in the bathroom doors in my places.

I don't like if they lie to me. For example, if they say they have no criminal background on their application and we check their criminal record only to find that they do, I don't go with them.

I tend to have problems with ax murderers.

So we do a thorough credit and background check on potential tenants. We want to make sure we have the right people moving in. We use a service to check credit. I actually want to have things set up so not only can I check credit but also turn tenants on to Equifax and Transunion and some of the other services out there. This is good news for your tenant, if they're paying on time. You can report this to the credit bureau and credit agencies. On one of our web pages we have a comment that says, "Help work on your credit. Move into a lease option so you can work on credit bruises."

I would like to be able to make that a reality. So if we could report to Equifax that someone is paying, it's a good thing for them and for us. These credit agencies can certainly help you get cashed out and buy a property.