DENYING A RENTAL APPLICANT:
There are certain guidelines that landlords must follow as instructed by the Fair Credit Reporting Act (FCRA) when denying an applicant:
- Send Adverse Action Letter with reason for denial
- Send a copy of the FCRA Summary of Rights
If an applicant is denied based on his/her credit history, he/she has a right under the FCRA, to obtain a free copy of his/her credit report from FABCO within 60 days.
The contact information for TransUnion is listed on the Adverse Action Letter.
If an applicant is denied based on his/her rental or criminal history, he/she can obtain a free copy of his/her rental report from FABCO within 60 days.
The contact information for FABCO is listed on the Adverse Action Letter.
In accordance to the Privacy, Compliance and Authorized End User Addendum to the FABCO Member Contract, you are not permitted to give a copy of the report to the denied applicant; they must contact FABCO or TransUnion to obtain a copy.
DENYING AN EMPLOYMENT APPLICANT:
While employment background checks do not put an inquiry on the applicant’s record, you are required to get written permission before running the report. To avoid disputes, it is recommended that you only run an employment background check on an applicant that you intend to hire, then base your final decision on their report. If the employee background check includes a credit report, you are required to follow the guidelines set by the Fair Credit Reporting Act (FCRA) when denying the applicant:
- Before taking any action in your final decision you must provide the applicant with a copy of their report and the FCRA Summary of Rights.Once you have sent this, allow a short period of time for the applicant to review and dispute any information they believe is inaccurate.
- At this point, if you decide to deny the applicant based on their credit report you must notify them of that fact. This can be done orally, in writing, or electronically.In any case, tenant applicants or employment applicants, it is important that you clarify that FABCO was not involved in the final decision.