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In 1970, Congress passed the Fair
Credit Reporting Act to give consumers specific rights in dealing
with Credit Reporting Agencies. The Act protects you by requiring
credit bureaus to furnish correct and complete information to
businesses to use in evaluating your applications for credit,
insurance, or a job.
The Federal Trade Commission enforces
the Fair Credit Reporting Act.
Also view the Residential
Landlords and the Fair Credit Reporting Act; Commission Issues
Compliance Guide and Describes Staff Compliance Review (January
15, 2002)
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Complying With The FCRA (Fair
Credit Report Act)
The guide helps landlords by providing
instruction on the key terms in the FCRA with examples, where
appropriate. It states that a "consumer report" from a
"consumer reporting agency" includes not only a credit
report provided by a credit bureau (such as Trans Union, Experian,
or Equifax), but also a report supplied by a tenant screening
service of the applicant's rental history procured from prior
landlords or housing court records. The guide states that
"adverse action" includes not only a landlord's denial of
a rental application, but also a landlord's action that imposes a
burden not required of all tenants -- such as requiring a co-signer
on the lease, requiring a deposit, or increasing the tenant's rent
or deposit to a higher amount.
The guide also provides several
examples to illustrate that the landlord must provide the notice if
the adverse action in any way is based on a consumer report. For
example, it discusses scenarios in which the landlord must provide
the adverse action notice if it obtained a consumer report that
played a factor in the landlord's action, even though its action is
based primarily on an applicant's income or prior reputation as a
tenant. Finally, the guide provides a road map for landlords to help
them draft their adverse action notices, including which consumer
reporting agency to name where there is more than one, what
information to provide about the agency or agencies, and other
information specified in the law concerning the consumer's rights
under the FCRA.
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