- [Instructor] Hey there, what's going on?
This is Seth from REtipster.com.
And in this video I'm gonna give you a quick tour
of a website called Cozy.
And one of the many things that Cozy
can be extremely useful for is in screening tenants
before you let them live in the property that you own.
And whether you are just getting
into the rental property business right now,
or even if you already have a few
and you've been managing them for a while,
in either case I can't think of a lot of good reasons
why you wouldn't screen tenants before you let them
live in your property.
There's a lot of compounding reasons
why you should be doing a little bit of due diligence
in figuring out what kind of a person they are,
what their credit history is,
if they have any prior incidents or issues with the law.
All the stuff is really good to know
just so you understand what kind of a person
you're dealing with,
what you can expect from them,
and just what kind of a person
is going to be living in the property that you own.
And this website right here, Cozy,
is really the best place I know of
to get this kind of information as a self-managing landlord.
And the great thing about it is that for landlords,
it's free.
They don't have to pay for anything.
All the costs for these reports are paid for by the tenant.
So it's not coming out of your pocket.
And Cozy just has a really nice easy to understand
user-friendly system, both for the tenant
and for you as you're navigating through this process.
And that's what I'm gonna show you here in this video.
So I've got an affiliate link beneath this video.
If you click on that you're gonna land on a page
that looks something like this.
And once you get here all you gotta do
is you can either click on get started
or go down here.
And then click on request screening reports.
If this is your first time on the site
and you've never used it before,
you just gotta create an account.
It's really quick and easy.
You don't get bombarded with emails
or anything like that.
You just need an account in order
to get started with this process.
So, go ahead and put in your email here.
And then you're a landlord if you're watching this,
so go ahead and click that.
And go on to the next steps.
I actually already have an account.
So I'm gonna quick migrate over to my home screen
and just show you where to go once you're logged in.
So once you're on the dashboard of the site
after you've logged in just go ahead and click on screening.
If you wanna request a new report from somebody,
just go ahead and click on this button right there.
And when you get started ordering a credit report
there's a few different things you can do here.
First of all, if you wanted to,
you can just get the credit report.
And that's just gonna show you their credit score,
their credit history,
and what their current financial picture
looks like with regard to the debts
that they have outstanding and that they're paying on.
You also have the option, say if you're not interested
in the credit report, you could just get a background check
to see if this person has any issues
that you would wanna know about.
However, it's a pretty good value if you wanted to get both.
It doesn't cost that much more
than just getting one of these.
So that's what I'm gonna do right here is just click this.
And that'll kind of inform me on not only
what this person's financial picture looks like,
but also if there's any big red flags
that come up in their background check
I'll know about that as well.
And as for the person we're gonna pull this on,
in order to show you what this looks like
from both your perspective and the tenant
or borrower's perspective,
I'm actually gonna pull this on myself
so I can kind of show you what it looks like to both people.
So I'm just gonna go ahead and put my information in here.
And the nice thing is,
this is literally all you need from your end.
Is just the person's first and last name
and their email address.
Cozy kind of handles the rest.
Which I'll show you in just a minute.
Go ahead and put that information in here.
And then when we scroll down here
if you don't already have an account,
you can go ahead and create one right here.
Personally I already have an account.
So I'm gonna go ahead and just sign in
and do it that way.
Go ahead and check this.
And then send the request.
Okay, so now that email has been sent.
And it's just a matter of me going
and checking my email.
And let's go ahead and do that.
Okay, so the applicant is going to receive
an email that looks like this.
As you can see, it's pretty straightforward.
Pretty easy to understand.
It just says who is requesting the background check
and credit report on them.
As long as that person's okay with it
they would just have to go ahead and click on get started.
And then the applicant is going to see a page
that looks like this.
And as you can see it's very straightforward.
There's no mystery about what's going on.
So they can scroll down to enter
in their payment information.
And then just complete all this personal information.
And then once that's completed,
they would just go ahead and check this stuff
and answer these security questions.
Then we're just gonna have to answer a handful
of security questions just to verify our identity.
And then once the applicant has answered these questions
to the best of their ability,
they're gonna click, next purchase,
and pay for these reports.
Okay, so now we're brought to this page.
It outlines what reports are being pulled
and who they're gonna be shared with.
And remember this is the view that the applicant is seeing.
So they are the ones paying for these reports.
Not the person who is requesting it.
So that's just an important thing to keep in mind.
It's actually free for the person who is requesting it.
And then once we've got all that information filled in
we'll go ahead and click purchase and share.
Okay, so immediately after the applicant pays
for that credit report it's gonna take them
to a page where they can see their own credit report.
And usually the background check,
if that's been ordered too, it might say pending
for a few minutes until that information gets pulled in.
And at this point, I'm gonna jump over to a couple
of examples of credit reports and background checks
that Cozy will generate.
Just so you can kind of see what a typical
report might look like.
This right here is what the credit reports look like.
And as we can see from this example,
this score is 744.
That's pretty decent.
I can't really tell you what metrics you need to use
as far as when you should say yes or no to an applicant.
But I can tell you from my experience
in the banking world where we would lend,
you know, millions of dollars to people
for commercial loans, the way we used to look at it
was for the most part if your credit score
was ever 700 and above, that was pretty much a shoo in.
There might be some tiny little issues
in the credit report worth investigating.
But for the most part, if somebody's score is,
you know, 700 or north of that,
they're probably a pretty safe bet.
I think on maybe three or four occasions
I saw credit scores that were over 800,
which is pretty darn uncommon from what I've seen.
Once the scores dip down to like 650 to 700,
then there may be a few questions you might wanna ask.
And once it goes to the range of like 600 to 650,
there's usually at least a reason or two
why it's that low.
And the person hasn't necessarily done everything perfectly.
And once it dips below 600 that was a pretty major issue
in terms of how we looked at it as commercial lenders.
And it would be pretty hard to approve somebody
who was that low.
And again I'm not saying
that you need to look at it that way,
but just to give you a frame of reference
that was how was looked at it.
So really when you see that score
that's helpful to know, but that's not everything.
In order to really understand what's going on,
you have to scroll down and dig into the details
of what this person's financial picture looks like
from a debt standpoint.
What I really like about these credit reports
pulled through Cozy and Experian
is that they're actually very very easy to use.
A lot of the credit reports I used to look at
in the banking world were ridiculously confusing.
It took me a long time to really understand
what I was looking at.
But these credit reports do a pretty good job
of showing you a visual representation
of what's going on.
So if we go ahead and scroll down.
When it comes down here to total monthly payments,
it gives you a nice little color grid,
illustrating what types of debts
they're currently paying on.
So it looks like this person has,
more than half of their debt
is related to real estate loans.
That kind of thing.
And then they've got some kind of a lease,
line of credit, auto loan, secured loan,
revolving charge account, and credit cards.
So they've got a pretty diverse array
of different debts that they're currently paying on.
And their total monthly payments are $5035.
So basically what this is telling us
is that this particular applicant
better have a pretty healthy income
if they're gonna be able to afford to make
all of these monthly debt service payments
and pay for their own personal living expenses
and make the payments that they're gonna have to make
to us each month.
So it's just something to keep in mind.
When we scroll down further,
this also tells us what their total current balance
is on all of their debts.
So they're, they're owning about this much.
If they were to pay everything off today
that's how much they'd have to come up with.
It also breaks down what portion of those debts
are baked into lines of credit, and auto loans,
and credit cards, and that kind of thing.
Let me scroll down further.
This is telling us about any accounts
that have ever been late.
And how long it's been since they've been late.
And any outstanding collections they have
or any public records.
And this is looking pretty good for this person.
They don't have any of that stuff.
I know something that I did use to see
quite a lot in the banking world,
for whatever reason people would get like,
these medical collections where they would owe
like $50 for something.
And it was basically a bill that the doctor's office
never really gave to them but it was still owning.
So this person didn't even realize
they had this collection out for them.
And as a result, it really kind of hurt their credit score
and all they had to do is just pay it off
to get it resolved.
So it is possible that you may come across
collections from time to time that are pretty insignificant.
But if you're seeing collections
that are like thousands of dollars,
then that's a pretty big red flag.
And you'll probably know this already
just based on their credit score
because this number up here is probably
gonna be a lot lower if they have a lot of collections
or accounts late or public records
or anything like that.
And when we keep scrolling down,
this tells us the account history.
And I think what this is typically doing
is going back about seven years
to tell you all of the accounts
that are currently open and ones that have been paid off
and closed as well.
The way this works on the actually reports you'll get
is that you can click these little down arrows
and it will expand to show you all of this information
for each of the accounts listed.
So for this one for example,
Department of Education,
that's most likely a student loan
that this person has and it's got a current balance
of $2075, original amount was $4500,
and their payment is $45.
And all of these green circles with a C in it
are telling you that they have been current
on all of those payments.
So they really have no history of being late
on this particular loan.
If you were to expand each of these
you would probably see the same thing.
For all of the other accounts
that they are currently paying on
or that they have paid off and closed.
When we go ahead and scroll down here,
this is also telling us some of the other inquiries
that have been made into this person's credit.
And basically what this means is that at some point
this applicant most likely applied for a loan
or a credit card or something with these other
lending institutions and at that point
they pulled a credit report on them too.
And I can say, when somebody gets a lot
of different inquiries on their credit,
it can actually hurt their credit score
because that's telling the credit reporting agencies,
hey, you know, this person is most likely
about to get saddled up with a bunch of debt
because their credit report is getting run a lot.
So that's just something to keep in mind.
These credit reports can be adversely affected
by a lot of different companies
pulling credit reports on them.
So it's just something to be aware of.
This is also gonna list some of their previous addresses.
That may or may not be helpful to you
but it's almost always gonna be included there.
And then for employment,
if the person's currently employed,
you should see that information here.
And this can also be helpful when it comes to
verifying a person's income.
Because keep in mind this credit report
is not telling you how much money a person makes.
It's just telling you what their current
and previous debts have been
and how effectively they've been paying those
on an historical basis.
So this really isn't even half the picture
of their total debt to income
and what that looks like.
If you wanna understand what their income is
one thing you could do is get their past couple
of pay stubs that they've received from their employer
and that can just be used to verify
what their approximate monthly income is.
You could also get their most recent W-2.
And that's going to verify what their annual income was
in the most recent tax year.
However, that doesn't necessarily guarantee
that they are currently employed.
It just shows what their historical income has been.
So it's, it's usually a pretty good indication
but it's not a guarantee that they're currently employed.
You could also get their most recent tax return,
which would detail all of their taxable income
and exactly what that looked like
for the most recent year.
So those are just a few of the things
you can do to verify what the person's income looks like.
And the reason that's important is because,
you know, to somebody who's only making $5000 a month,
this is a ridiculously high amount of debt to be paying on.
But for somebody who's making $20000 a month,
this is not bad at all.
So that's why it's important to understand
how much money they're making
and then kind of factor that into this whole equation
of how much debt they've got.
And then when we scroll down here to the bottom,
it's also going to let you know
of any particular factors
that may be hurting their credit score.
So these reasons here, the date that the oldest account
was opened is too recent, lack of sufficient,
relevant real estate account information,
the total of all balances on accounts is too high,
or balances on bank card or revolving accounts
too high compared to credit limits.
So a lot of times these things
can be a little petty and don't necessarily
mean anything bad but it's important to see this
because that could be part of the reason
why this person's credit report isn't 800.
And I will say, if you ever do come across
payments that are late or historical payments
that have been late, or collection accounts,
or anything like that,
it doesn't necessarily mean you need to automatically
turn them down.
It could, but it could also just mean
you need to have a conversation with that applicant
to understand, okay, why were these payments late?
Why are you currently late on this?
Are you gonna get this resolved?
Is this something that we can expect to see from you
if we take you on as a tenant or a borrower?
The credit report is going to equip
you with a lot of information to just help
flesh out the story and understand what is going on.
And what kind of a person you're dealing with
in terms of financial responsibility.
So that's just a quick overview of the credit report.
In terms of the background check,
if you do pull a background check
it's gonna look something like this example.
And hopefully on the background check you pull
it's just gonna show a lot of green clears right here.
But if there are any issues they would show up
something like this and you would have to then
investigate or ask questions of the applicant
just to find out what's going on here.
And that may or may not cause you to deny them.
It's really up to you.
But this will at least let you know
if you're dealing with anybody who has got
any kind of a checkered past.
And it doesn't necessarily mean you have to turn them down.
But again that's up to you decide,
and this will kind of help you understand
who you're dealing with.
So again, that is Cozy.
And that is how you can pull credit reports
and background checks through this service.
It's pretty easy to use this for pretty much
any purpose when you need to pull
a credit report or a background check.
I think as long as you understand
how to use this and you want to use this,
it's pretty easy to get this information
on your applicants and it doesn't really cost you anything.
So, it's a pretty slick service.
Definitely worth checking out.
Again, I've got an affiliate link to Cozy
beneath this video.
If you end up clicking on that
and ordering your credit reports through that
it will generate a very very commission
for the REtipster blog.
So if you choose to do that,
I appreciate your support so much.
And of course, Cozy is not the only place
to get this information.
I just think it happens to be
one of the easiest ways to get it.
Thanks again for watching and we'll talk to you later.