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As a landlord – or property manager or other housing provider – you may run background checks on prospective tenants. These reports can include rental and eviction history, credit history, criminal records, and more. Background checks from consumer reporting agencies are consumer reports and under the law you have certain responsibilities when it comes to using them. For instance, you can get a consumer report only if you have a permissible purpose – and you may not use the consumer report for another reason.

What if the information in a consumer report leads you to deny housing to the applicant or require them to pay a deposit you wouldn’t make other applicants pay? Under the Fair Credit Reporting Act, you must inform applicants in what’s called an adverse action notice. That’s true even if the report was only a minor factor in your decision. An adverse action notice tells people about their rights to see information being reported about them and to dispute inaccurate information. It’s a best practice to provide that adverse action notice in writing because it benefits both you and the applicant. Written notices give you proof of compliance with the law. They also better enable applicants to assert their rights to request a copy of the report from the consumer reporting agency and to dispute any mistakes in it.

The Fair Credit Reporting Act specifies the information you must include in an adverse action notice and also details other responsibilities for using consumer reports, so brush up on the FTC’s updated resources for landlords to see what you need to know.

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Joseph Lapp
July 27, 2023

What about agencys that let the landlord interact and steer what data gets used in the report along the way as a means of manipulating a report into producing results that qualify for denial? When a denial was the intention before the report was even started. This must be a form of shady or illegal business practices I would assume

July 29, 2023

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