Tenant Screening Basics

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Information contained in the answers may not be accurate or current. Answers pertaining to matters of law may not be valid for your jurisdiction. Consult an attorney regarding laws and regulations in your jurisdiction.

Why do I need a credit report?

A credit report can help a property owner or manager make an informed rental decision. With the use of a credit report, landlords can easily determine a prospective tenant's payment history. In addition to a standard credit report, a CreditLink Profile also includes verification of the applicant's Social Security Number and address, Alias Identification, Fraud Alert, and Employment History, all of which will help reveal ID theft. Finally, knowing the FICO Credit Risk Score and Civil Judgment history assists in a determination of whether the applicant has the means to afford the rental space.

Why do I need a criminal background check?

While a credit report will give a landlord a good look at his or her prospective tenant's financial history, it says little about the applicant's background. A criminal background check provides information to assess an applicant's compatibility, and determine whether or not the prospective tenant will be a safe addition to your rental community. Additionally, you may be required to screen for criminal history, since some rental subsidy programs prohibit landlords from renting to a tenant who illegally uses controlled substances or is a registered sex offender.

Should I choose to screen only the applicants who seem risky?

Federal and State fair housing laws require that any screening criteria used be applied consistently to all applicants. This means that you should screen all of your applicants using the same methods and standards.

What do I need to get a credit report?

At a minimum, you will need to provide the applicant's name, social security number, current address, and (for a criminal background report) date of birth - the more identifying information you provide, the more detailed the report. For example, if you provide driver's license information, you will also receive a bad check search.

Why can't you e-mail the results to me?

We take our responsibility for safeguarding sensitive information seriously. We follow federal laws and industry standards to protect you and your prospective tenants. At this time, e-mail is just not a safe nor secure option.

Can I charge extra fees for the background and credit checks?

In California, California Civil Code section 1950.6 limits the fee owners may charge a prospective tenant to cover the costs of screenings. The fee cannot be more than the actual out-of-pocket costs of gathering information on the applicant. As of January 2008*, the maximum fee a landlord may charge an applicant is $40.64. The fees in your state may differ, please check with your local laws and regulations.

*Allowable cost is adjusted annually based on the Consumer Price Index.

What should I do with the prospective tenant's credit report once I have approved or denied him or her?

Effective June 1, 2005, the Fair and Accurate Credit Transactions Act (FACTA) calls for the proper disposal of information in consumer reports and records to protect against "unauthorized access to or use of the information."

The standard for the proper disposal of information derived from a consumer credit report is flexible, and allows the organizations and individuals covered by the Rule to determine what measures are reasonable based on the sensitivity of the information, the costs and benefits of different disposal methods, and changes in technology. In other words, you may destroy the documents however you see fit, as long as they cannot be reconstructed.

Some jurisdictions require that you keep the records on file for a period of time. For more information, check with your legal counsel.

The credit report I received on an applicant has negative information, and I choose not to rent to him or her. What do I do?

According to the Fair Credit Reporting Act, you are required to notify a denied applicant in writing.You will need to send or give the applicant a Notice of Denial to Rent and keep a copy in your file to document your compliance with the law. This is extremely important for full compliance with fair housing laws.

An applicant who I have denied wants to know what is reported on his or her credit report and disagrees with it, what can I do?

A denied applicant may, within 60 days of the date of the report, request a copy of the credit report. The information needed by the applicant should be provided on the Notice of Denial to Rent that you give.

Do I need to give the applicant a copy of his or her credit report?

In California, pursuant to California Civil Code 1950.6(f), if the applicant has paid an application-screening fee and requested it, you or your agent must provide a copy of the credit report. Other jurisdictions may have different requirements. For more information, check with your legal counsel.

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