Fair Credit Reporting Act News
Find out how landlords can comply with FCRA standards to guarantee equitable and legal tenant screening procedures and make better rental decisions
Thursday, June 27, 2024 - Landlords that want to guarantee equitable and legal tenant screening procedures must navigate the Fair Credit Reporting Act regulations. Landlords using consumer reports to make leasing decisions are subject to rules and requirements laid forth by the FCRA. Landlords must be aware of these responsibilities in order to safeguard themselves from possible legal problems and to offer a just screening procedure to potential tenants. The FCRA controls the use of consumer reports, credit reports, background checks, and other pertinent information, in the tenant screening process. To be sure they follow the FCRA and stay out of possible legal hot water, landlords have to follow certain protocols. Getting written consent from the potential tenant before viewing their consumer record is one of the most important FCRA requirements. The tenant must be sure that they understand and consent to the background check by having this consent be distinct from other application paperwork. The more due diligence one undergoes the less likely a Fair Credit Reporting Act lawsuit is likely.
Once a landlord receives the required authorization, they have to make sure the consumer report is used for legal reasons connected to the renting decision. This entails assessing the rental history, creditworthiness, and other pertinent elements of the tenant. It's noteworthy that the FCRA mandates that landlords give tenants specific disclosures and notifications all along the screening process. If a landlord chooses to take negative action, such as rejecting a rental application or demanding a larger security deposit, based on the information in the consumer report, they are required to adhere to particular FCRA guidelines. This includes notifying the tenant of their right to a free copy of their consumer report within 60 days, notifying the tenant of the name, address, and phone number of the consumer reporting agency that supplied the report, and notifying the tenant that the consumer reporting agency did not make the adverse decision and cannot explain why the decision was made. Giving these disclosures guarantees tenants know their rights and can take the necessary steps if they think the information in their consumer report is false or lacking. Legal action against the landlord, including possible Fair Credit Reporting Act lawsuits, may follow failure to meet these standards.
Landlords should follow FCRA guidelines and best practices for tenant screening as well to guarantee a fair and uniform procedure. Among these is creating a uniform screening procedure that specifies the standards by which rental applications are assessed. Landlords can lower the possibility of discrimination complaints and guarantee a just screening process by requiring all applicants to meet the same standards. Along with written permission forms, consumer surveys, and unfavorable action notices, landlords should maintain thorough records of all tenant screening operations. Should there be a disagreement or legal challenge, these documents can offer important supporting documentation. For continued compliance, landlords should also be aware of any updates to FCRA rules and other pertinent legislation. Security and privacy of applicants' personal information are two more crucial components of tenant screening. Landlords should use safe storage techniques and restrict access to just authorized staff members in order to protect consumer reports and other sensitive data. Safely removing electronic files or shredding consumer reports and associated paperwork is another essential step to stop unwanted access.
