Tenant Screening Report

A tenant screening report is a consumer report a landlord or property manager obtains about an applicant in order to decide whether to rent, and often on what terms. The Consumer Financial Protection Bureau lists what one may contain: credit reports, "rental history information including any eviction actions and lawsuits", employment verification, criminal history, sex offender registries, a national terrorist watchlist, and "a risk score or recommendation based on criteria selected by the landlord".

The naming needs a sentence, because the document is regulated under a name nobody uses for it. The Fair Credit Reporting Act does not contain the phrase "tenant screening report"; its operative term is consumer report at 15 U.S.C. 1681a(d), which reaches far beyond credit. The CFPB and the Federal Trade Commission both use the consumer-facing phrase, and the FTC says the point squarely: "Tenant background check reports are consumer reports." So the rights an applicant has are the Fair Credit Reporting Act's rights, arriving under a different label.

A screening report is not a credit report with extra fields, and the difference matters when something is wrong. A credit report comes from a nationwide credit bureau and describes borrowing. A screening report is usually assembled by a separate company that buys credit data and adds court records, previous-landlord information and, frequently, a score or a recommendation of its own. That assembled product is what the landlord reads, which means an applicant who checks only their credit file has not seen the document that decided the application.

The landlord's right to pull it rests on the applicant applying. Section 1681b(a)(1) makes it unlawful for a consumer reporting agency to furnish a report except for a listed permissible purpose. The one a landlord relies on is at 1681b(a)(3)(F)(i): the user "otherwise has a legitimate business need for the information ... in connection with a business transaction that is initiated by the consumer". A rental application is that transaction, which is also why a landlord cannot lawfully run a report on someone who has not applied.

A denial is an adverse action through the catch-all, not through the credit limb. The definition at 1681a(k)(1) lists insurance, employment and government licenses explicitly, and then adds at (k)(1)(B)(iv) an action or determination "made in connection with an application that was made by, or a transaction that was initiated by, any consumer" and "adverse to the interests of the consumer". Renting is caught there. And because the limb turns on being adverse rather than on outright refusal, a landlord who approves the application but demands a larger deposit or a cosigner because of the report has taken adverse action too.

Four duties follow, and each is written into the statute. Under 15 U.S.C. 1681m(a), a person who takes adverse action based in whole or in part on a consumer report must: (1) give "oral, written, or electronic notice of the adverse action"; (2) disclose any numerical credit score used, with the accompanying information at 1681g(f)(1); (3) give "the name, address, and telephone number of the consumer reporting agency ... that furnished the report", together with "a statement that the consumer reporting agency did not make the decision to take the adverse action and is unable to provide the consumer the specific reasons why the adverse action was taken"; and (4) give notice of the right to obtain a free copy of the report from that agency, "an indication of the 60-day period" for doing so, and the right to dispute the accuracy or completeness of the information.

Read the third duty carefully, because it explains a frustrating conversation. The statute requires the screening company's contact details and a statement that the company cannot tell the applicant why they were turned down. The landlord made the decision; the company supplied the file. An applicant who calls the screening company to argue about the outcome is talking to the party the statute says cannot answer that question, while the party who can is the landlord. What the screening company can do is correct the file, through the dispute process at 1681i.

The free copy is a right to ask, not a delivery. Nothing in 1681m(a)(4) sends the report automatically. The applicant requests it from the agency named in the notice, within 60 days of the adverse action, and the copy is then free. Separately, where the company is a nationwide specialty consumer reporting agency, which 1681a(x) defines as one compiling files nationwide on medical records or payments, "residential or tenant history", check writing history, employment history or insurance claims, the applicant has a free disclosure right once every twelve months under 1681j(a)(1) even with no denial at all. Checking before applying is therefore possible, and rarely done.

Accuracy is the practical problem, and the report's own design creates it. Court records are indexed by name and date of birth rather than by a unique identifier, so an eviction filing or criminal record belonging to a different person with a similar name can attach to the wrong file. An eviction filing is a court event whether or not the tenant won, so a case the tenant defeated can still appear. And because these reports are assembled by many small companies rather than by three large bureaus, an applicant who has cleaned up one file has not necessarily cleaned up the next landlord's.

State and local law sits on top of all of this and varies. No federal law caps what a landlord may charge to run a report, limits how far back a screening company may reach beyond the Fair Credit Reporting Act's own obsolescence rules, or requires a landlord to accept a report the applicant already paid for. Some jurisdictions do all three. Which ones is a question answered locally, and the fee itself is a separate subject with its own rules.

The sequence is fixed by statute. The applicant submits a rental application, which supplies the permissible purpose at 1681b(a)(3)(F)(i). The landlord orders a report from a screening company, which assembles credit data, court and rental records, and often a score. The landlord decides. If the decision is adverse in whole or in part because of the report, the four duties in 1681m(a) attach, and the applicant has 60 days to request a free copy and an unlimited right to dispute what it contains under 1681i.

Consider an example of how the adverse-action trigger works when nobody is turned down. Camila applies for an apartment advertised at $1,750 a month with a one-month security deposit. The screening report returns a low risk score, and the landlord approves her but requires a deposit of two months' rent instead of one. Her deposit rises from $1,750 to $3,500, a difference of $1,750 in cash she has to produce at signing.

That is still adverse action. The determination was made in connection with a transaction Camila initiated and it is adverse to her interests, which is what 1681a(k)(1)(B)(iv) describes, so the landlord owes her the 1681m(a) notice even though the application succeeded. She can then request the report free within 60 days, read what produced the score, and dispute anything inaccurate. Nothing in the statute makes the duty turn on whether the application succeeded, which is why the words "adverse to the interests of the consumer" are the ones worth knowing: an approval on worse terms is still adverse action, and the notice is still owed.

Pros

• The report is covered by the Fair Credit Reporting Act, so an applicant has statutory rights to see it and to have errors corrected rather than being told nothing.
• The adverse-action notice names the company that supplied the file, which is the only reliable way to find out which of the many screening companies was used.
• Where the company is a nationwide specialty consumer reporting agency, an applicant can obtain a free disclosure once a year and check the file before applying rather than after being refused.
• Standardized screening gives a landlord a consistent basis for decisions, which is a defense against the accusation that applicants were treated differently for the wrong reasons.

Cons

• Court records are matched on name and date of birth, so a filing belonging to a different person with a similar name can land in the file.
• An eviction filing appears whether or not the tenant prevailed, so winning the case does not remove the record of it.
• The score or recommendation is generated from criteria the landlord selects, and neither the criteria nor their weights are disclosed to the applicant.
• There is no single file to correct. Screening companies compile their files independently of one another, so a dispute resolved with one does not fix the next landlord's report.
• The 60-day free copy has to be requested. An applicant who does not act on the notice loses the cheapest route to the document that decided the application.