Rental application denied? What the landlord must tell you

If a landlord turns you down based in whole or in part on a tenant screening or credit report, the federal Fair Credit Reporting Act requires an adverse action notice. It must name the company that supplied the report and tell you how to get a free copy and dispute errors. The landlord does not have to explain every reason for the decision, but it does have to point you to the report behind it.

The rule sits in 15 U.S.C. 1681m(a), and it applies to any "adverse action," which covers more than an outright denial. The Federal Trade Commission lists requiring a co-signer, requiring a deposit that would not be required of another applicant, and charging a higher rent than another applicant as adverse actions too. The Consumer Financial Protection Bureau gives the same examples in its guidance for renters. So an approval with conditions attached can still trigger the notice.

Under the statute, the notice must give you the following:

Oral notice is legal, but the FTC calls written notice the best practice for landlords and applicants alike. If a leasing agent tells you over the phone that "your background check came back," ask for the screening company's name and contact information right then, and ask for the notice by email. The duty applies even when the report was only one of several reasons for the decision, because the statute covers actions based on a report "in whole or in part."

Getting the report and fixing mistakes

The free copy comes from 15 U.S.C. 1681j(b). A screening company must give you your file at no charge if you request it no later than 60 days after you receive the adverse action notice. That request goes to the screening company named in the notice, not the landlord. Read the whole report, including any criminal and eviction records, and confirm that each entry is actually yours, with the right name, dates, and case outcome. Write down every item you plan to challenge before you contact the company.

Disputes run through 15 U.S.C. 1681i. Once the screening company receives your dispute, it must reinvestigate for free and finish within 30 days, deciding whether the information is inaccurate and either recording its current status or deleting it. If you send relevant new information during that window, the company can take up to 15 more days. The CFPB also suggests disputing with the person or business that supplied the bad information, such as a court records vendor or a prior landlord.

California adds a faster route for applicants who paid a fee. Civil Code section 1950.6 requires a landlord who collected an application screening fee to give the applicant a copy of the consumer credit report within seven days of receiving it, by personal delivery, mail, or email. The landlord must also provide a receipt that itemizes the fee and must refund any part not spent on a reference check or credit report.

Here is how the dates line up for Maya, a California applicant. She pays a screening fee on May 4, and the landlord receives her report on May 6, so her copy is due by May 13. On May 8, the landlord emails a denial with an adverse action notice. Maya has until July 7, which is 60 days after she received the notice, to request her free file from the screening company. She spots an eviction record for a different woman with the same name and files a dispute that the company receives on May 15. Its 30-day period ends June 13. If Maya sends court records on May 20 showing the case belongs to someone else, the company can extend its review by up to 15 days, to June 28.

A clear notice to an applicant might read like this:

Dear Maya Ortiz: We are unable to approve your application for 412 Elm Street, Unit 3. Our decision was based in whole or in part on information in a consumer report from [screening company], [mailing address], [toll-free phone number]. The screening company did not make this decision and cannot tell you the specific reasons for it. You have the right to a free copy of your report from the screening company if you request it within 60 days after you receive this notice. You also have the right to dispute the accuracy or completeness of any information in the report with the screening company.

If a credit score was part of the decision, the notice should add the score, the range of possible scores, the key factors that hurt it, the date it was created, and the company that provided it. Landlords building a screening process can pair this notice with our guide to what you can and cannot ask an applicant, and approved applicants move on to signing a residential lease.

Sources

• 15 U.S.C. 1681m (govinfo.gov)
• 15 U.S.C. 1681j (govinfo.gov)
• 15 U.S.C. 1681i (govinfo.gov)
• 15 U.S.C. 1681g (govinfo.gov)
• FTC: Using consumer reports, what landlords need to know
• CFPB: What should I do if my rental application is denied because of a tenant screening report?
• California Civil Code section 1950.6