Credit History & Tenants
- Under the Fair Credit Reporting Act (FCRA), landlords are required to keep any information obtained in a tenant or prospective tenant's credit report confidential. The FCRA allows a landlord to request a tenant's credit report in the following instances: where the tenant has given written permission; where the landlord is investigating the tenant's credit in response to an application; the landlord is reviewing the credit of an existing tenant for lease considerations; or the tenant owes the landlord money.
- Consumer credit reports pulled by landlords can reveal crimes. Criminal records can appear on a tenant's credit report for up to seven years. This can have an adverse effect on a tenant's rental ability.
- Part of what landlords see in consumer credit reports are credit scores. These are three-digit numbers assigned to each report that gauge a tenant's financial stability or credit risk. One of the most popular credit-scoring models is the Fair and Issac Corp. (FICO) score.
FICO credit scores above 750 are excellent credit risks. Scores around 650 are fair. Scores below 600 are poor credit risks. - Bankruptcies can show up on a tenant's credit report for up to 10 years. As bankruptcies and foreclosures are the most negative information on a consumer credit report, this can have a significant impact on the decision to approve a tenant's rental application.
- LexisNexis and CoreLogic are companies that collect consumer rental information for reporting in specialized tenant history reports. Tenant history reports (also known as resident history reports) provide information concerning rental payment history, evictions and other legal actions related to a rental property. This information is often used in conjunction with a tenant's credit report during the rental application process.