How to spot fake pay stubs and credit reports

As a landlord, you need to make sure you rent to tenants who can afford to pay the rent and who actually pay their bills, so you naturally check pay stubs and credit reports. You are doing that, right?

The problem is that some people aren’t completely honest when trying to rent a property. They might pretend they make more money than they really do by giving you a fake pay stub. Or they might try to give you a doctored credit report to make them appear creditworthy when they really aren’t. So how can you make sure what you’re learning about potential applicants is true?

Look at more than just the pay stub

People can simply go on the internet and use a template to make their own paycheck stub. And these paycheck stub generator sites are super easy to find.

The result?

The pay stubs look official, and people can enter any information they like. You won’t be able to tell just by looking at this type of fake pay stub whether it’s the real deal or not. Here are four better ways to verify income:

1. Request a W-2 form. Employers prepare this form, which shows an employee’s gross earnings, deductions, and taxes. It’s possible to fake W-2 forms, too. But it’s a much harder process and involves an entire criminal enterprise of tricking payroll personnel. W-2 forms are a more accurate way to verify income than pay stubs are. You are far more likely to get fake pay stubs than you are fake W-2 forms.
2. Look at your applicant’s bank account. Check to see whether the deposits match what they say their income is.
3. Call their employer. First, find out whether they work where they say they do. Then ask whether the employer can verify that the applicant earns what they say they do. Not all employers will verify salary, but they can at least let you know whether the applicant works there.
4. Request form 4506 from the IRS. With this form, you can see a transcript of a prospective tenant’s federal tax record.

Always run your own credit check

If a tenant offers to give you a copy of their credit report to “save” you from doing this step yourself or because they say they don’t want to ding their credit with a credit inquiry from you, politely decline. Why? It’s easy to fake a credit report, too.

The remedy is simple: you need to request a credit report yourself. I use Cozy for this service, and it works out great. The credit reports come from Experian, one of the three credit bureaus. If you use Cozy for your tenant applications, you can request that Cozy require all applicants to agree (and pay for) a credit check and a background check.

And bonus: Just letting applicants know that you use a screening service is itself a way of screening tenants. Applicants who can’t afford your place will probably move on or will be upfront with you about anything negative you might find.

Related: 6 Ways to Handle Applicants with Bad Credit

Bottom line

It would be nice to be able to instantly spot fake pay stubs and credit reports. But that just isn’t possible in many cases. You need to verify information by crosschecking and, ideally, using a screening service such as Cozy.