The Federal Fair Credit Reporting Act

If you rely on credit agencies and other sources of information to make decisions about whom you will accept as a tenant, you need to comply with the federal Fair Credit Reporting Act (FCRA).

It is a good idea to read the Federal Trade Commission (FTC) landlord guide "Using Consumer Reports: What Landlords Need to Know" to ensure compliance with the FCRA. It provides guidance on how to use reports from credit bureaus and describes what you must do when evaluating an applicant.

To avoid the requirements of the FCRA, verify the information contained in the application on your own rather than using a credit reporting agency. Although credit agencies provide information you cannot access on your own, you can still verify income and employment, check criminal history and talk to previous landlords.

Many records related to a prospective tenant’s background are available to the public, including real estate, military and driving records. This is a simple way to screen out tenants based on the information on the application alone.

After screening based on the application, then be sure and run a credit check on the final remaining applicants before choosing the best prospect. CompleteLandlord.com offers comprehensive tenant screens just for this purpose.