Tag: tenant screening
As fraud continues to rise in the rental housing market, tenant screening practices are evolving. In an earlier blog, I explored how Experian Observed DataTM can provide early indicators of income and employment consistency, offering screening companies a way to reduce reliance on costly or time-intensive verification methods. In this follow-up, I explore two additional tools that strengthen the tenant screening process: Experian VerifyTM for Research Verifications and Experian Verify for Permissioned Verification's AI-powered Document Review. Used together, these solutions enable a layered approach that boosts both efficiency and prevention of fraud. Modernized Research Verifications Manual employment and income and employment checks—once the standard for tenant screening—are time-consuming and often inconsistent. Traditionally, screening companies had to reach out directly to employers and request proof of employment. While still useful, this method puts pressure on internal resources and is not always scalable. To streamline manual verification, many organizations are partnering with third-party providers, especially those that take a digital-first approach. Outsourcing allows screening companies to delegate outreach, follow-ups, and fraud detection to specialized teams trained in document validation and employer communication. These services deliver the same insights internal teams would gather, while freeing up in-house resources for more strategic initiatives. By leveraging digital tools such as conversational AI, online forms, and automated workflows—combined with human oversight—digital-first vendors offer a more scalable and cost-effective alternative to fully manual processes. This approach not only reduces operational costs but also shortens turnaround times, helping screening companies respond faster without compromising accuracy or fraud resistance. Key advantages:[MJ1] Reduces the burden on internal staff Ensures consistency and fraud awareness in document review Provides a reliable fallback when other verification tools return limited data This approach is especially valuable when initial data sources yield incomplete results and further confirmation is required. AI-Enhanced Document Upload and Review Another common scenario in tenant screening is the submission of income documents by the applicant, often in the form of paystubs or bank statements. Manual review of these documents is prone to error and increasingly vulnerable to sophisticated forgeries, including those generated by artificial intelligence. AI-powered document analysis tools are now helping screening companies process uploaded documents more securely and efficiently. These platforms typically work by: Allowing applicants to upload documents through a secure portal Using AI to scan for signs of tampering, fabrication, or inconsistency Returning standardized results that are easier to evaluate and compare By automating the detection of anomalies and potential fraud indicators, these tools reduce the workload for staff while improving the reliability of the review process. Benefits include: Faster review and turnaround times Improved fraud detection capabilities Greater consistency across applicants This method is especially useful when traditional employer APIs are unavailable or when screening companies need additional confirmation beyond initial data sources. A Layered Approach to Verification By combining different verification methods, screening companies can design workflows that adapt to a wide range of applicant profiles and risk scenarios. A layered strategy might include: Starting with an inexpensive source of income or employment data to identify likely matches Using AI-based document review when additional validation is needed Turning to manual research verifications only when necessary This cascading process allows screening companies to control costs while maintaining a strong defense against fraud. It also ensures that higher-cost methods are used only when the earlier steps do not provide enough confidence to proceed. Modern Challenges Require Modern Solutions Fraud in tenant screening is increasing rapidly. According to industry surveys, over 93 percent of screening companies have encountered fraud in the past year, and the majority have dealt with falsified income documentation. Traditional approaches, especially manual review, are no longer sufficient on their own. By rethinking verification strategies and incorporating modern tools like outsourced research verification and AI-enhanced document review, screening companies can reduce risk, improve efficiency, and better prioritize their resources. Learn More For organizations interested in implementing these types of verification tools, several providers—including Experian—offer services designed to support this layered approach. These solutions can help screening companies strike the right balance between cost, compliance, and fraud resistance. To learn more, visit experian.com/verify.
Income and employment verification fraud is surging in the tenant screening industry, putting traditional verification methods under intense pressure. As economic uncertainty grows and document forgery becomes more sophisticated, it's clear that legacy processes are no longer sufficient. Recent findings highlight the urgency for change. According to the NMHC Pulse Survey, 93.3% of property managers reported encountering fraud in the past year, with 84.3% citing falsified paystubs and fake employment references as the most common tactics. As AI-generated forgeries become increasingly convincing and accessible, relying solely on manual review is proving inadequate. A Shift in Strategy: Toward Smarter Income and Employment Verification Historically, tenant screeners have relied on methods such as manual document review, direct employer contact, payroll APIs, and verification of assets (VOA). While these remain important, they are no longer capable of keeping pace with today’s verification challenges. In response, many screening companies are exploring new income verification tools that offer improved fraud prevention, lower operational costs, and faster turnaround. These innovations include layered approaches that combine observed data, permissioned uploads, and automated fraud detection technologies. Introducing Experian Observed DataTM in Tenant Screening One emerging solution in the fight against rental application fraud is the use of observed data during tenant screening. This method uses collectively sourced insights to assess whether an applicant’s income and employment claims are likely to be accurate. Experian Observed Data is takes inputs from many sources including creditors, property managers and others. This type of data starts out as consumer stated data but is substantiated by third party creditors who have originated lending products and report on the performance of these products. Although this method is not FCRA-compliant and cannot be used to approve or deny applications, it is highly effective as an early step in the screening process. Some sources of Experian Observed Data include a confidence score that can help screeners assess how closely an applicant’s stated information aligns with observed trends and can help screening companies to better assess their prioritization queue to determine if more data points are needed. Why Experian Observed Data Matters To combat fraud without driving up costs or slowing down the tenant screening process, screening companies need reliable, efficient tools. Experian Observed Data supports this need by offering a faster, more scalable approach to assessing risk. Key benefits include: Early detection of discrepancies in reported income or employment The ability to prioritize high-risk applications for further review A more cost-effective alternative before committing to premium verification services For instance, if an applicant has a strong credit report and clean background check, and Experian Observed Data supports their stated income, further verification may be unnecessary. If inconsistencies are flagged, screening companies can escalate to tools such as AI document analysis or direct outreach. Fraud Prevention Through Smarter Workflows The use of Experian Observed Data also aligns with a broader shift toward AI document fraud detection and layered verification strategies. Instead of applying the same tools to every application, screening companies can now implement decision trees that use lower-cost tools first, escalating only when risk or uncertainty increases. This adaptive approach is particularly relevant as screener companies strive to improve accuracy and efficiency at scale. By deploying Experian Observed Data as a first step, tenant screening professionals can better allocate resources while remaining vigilant against fraud Future Proofing Verificaiton As the income and employment verification landscape evolves, screening companies must move beyond legacy methods and adopt tools that are responsive to today’s challenges. Experian Observed Data provides a scalable, low friction starting point that supports smarter decision-making and better fraud detection. Coming to our next blog: We will explore how manual research verifications and AI-powered document upload solutions enhance the effectiveness of modern income verification tools, creating a more resilient and adaptable tenant screening process.
Recent statistics certainly illustrate why many renters are feeling anxious lately. More than 40% of renter households in the U.S. — that’s 19 million households — spent more than 30% of their total income on housing costs during the 2017–2021 period, according to the U.S. Census Bureau’s new American Community Survey (ACS). Households that spend more than 30% of their income on housing costs — including rent or mortgage payments, utilities, and other fees — are considered “housing cost burdened” by the U.S. Department of Housing and Urban Development. Digging a little deeper, nearly 8% of the nation’s 3,143 counties had a median housing cost ratio for renters above 30% during the five-year period, according to ACS, and nearly a third of all U.S. renters lived in these counties. Unsurprisingly, 60% of Americans say they’re “very concerned” about the cost of housing, according to the Pew Research Center. The financial plight of renters today underscores the importance of incorporating renter payment history into screening efforts. It also indicates why reporting positive rent payments to credit bureaus can be such a powerful amenity. Rental data: The key to optimizing the screening process Simply put, a screening process that includes an applicant’s rental payment history provides a more comprehensive understanding of their risk profile and likelihood of paying rent on time and in full. That’s especially critical in an environment when paying rent can be something of a financial burden for many. Wouldn’t an apartment manager want to make a leasing decision by taking into consideration every possible bit of relevant data, especially the most relevant data available — rental payment history? Credit scores are often at the heart of an operator’s screening process. A credit score can give a very general sense of the risk posed by a prospect, but it doesn't provide crystal-clear insight into the likelihood of an applicant paying their rent on time and in full. Even people who are financially responsible and diligent about paying their rent can find themselves with less-than-ideal credit scores. Maybe they were injured in an accident, came down with a serious illness or lost their job, and then suffered a host of financial consequences that harmed their credit score. It can't be assumed people who have been through these situations won't pay their rent on time. At the same time, especially given the burden rent payments pose for many renters, reporting positive payments to credit bureaus can serve as an effective way to attract residents. Unfortunately, unlike homeowners, apartment residents traditionally have not seen a positive impact on their credit reports for making their rent payments on time and in full, even though these payments can very large and usually make up their largest monthly expense. Rental reporting According to the Credit Builders Alliance (CBA), renters are seven times more likely to be credit invisible — meaning they lack enough credit history to generate a credit score — when compared to homeowners. But by reporting their on-time rent payments to credit bureaus, apartment communities can help renters build their credit histories, which can make it easier for them to do things such as secure a car loan or credit card — and to do so at favorable interest rates. Additionally, rent reporting gives residents a strong incentive to pay their rent on time and in full. And it can provide apartment communities with a competitive advantage since this financial amenity is not widespread throughout the rental-housing industry. The data is clear: this is a challenging time for many renters. But by making rental payment histories part of their screening, operators can minimize their risk. And by reporting positive rental payments, they can attract residents and help them build a better financial future. To learn more about Experian’s largest rental payment database and how to start reporting with us, visit us online. Experian RentBureau™