Before a consumer reporting agency will sell you a report, it will ask you to certify why you want it. That certification is not a form to click past. Section 1681b(f) of the Fair Credit Reporting Act makes it unlawful to obtain a consumer report without a permissible purpose and without certifying that purpose, and a landlord’s permissible purpose is narrow: a legitimate business need in connection with a business transaction initiated by the consumer (§ 1681b(a)(3)(F)).
In plain terms, the applicant has to have applied. So the first practical step is the paperwork step: get a signed application with report authorization on it before you go looking for a provider. If you don’t have a form yet, the free rental application has the authorization section built in.
Then the rest of it.
Step 1: get written authorization, on the application
The applicant signs a statement authorizing you to obtain a consumer report in connection with this rental application. Keep the signed copy. It is the document that answers the question of whether you had permission, and a screenshot of a text message saying “sure, go ahead” is a much worse answer.
Two habits that cost nothing. Use the same authorization language on every application, so it cannot vary by applicant. And date it, because permission for one application is not permission forever.
Step 2: pick how the report gets paid for
There are two workable arrangements and one that causes trouble.
Applicant pays the agency directly. The applicant is invited into the provider’s flow, enters their own identifying information, and pays there. You never touch a Social Security number, and in California this is also the cleanest way to stay inside the screening fee rules, which cap the fee and set refund deadlines under Civil Code § 1950.6.
You pay and recover it through a screening fee. Legal in most states, capped in some, and it puts you on the hook for the receipt and refund obligations your state attaches to that fee.
Reusable reports the applicant brings. Increasingly common and often fine. Check the date on it and check which agency produced it, because a report the applicant assembled themselves from a free credit site is not the same product.
The arrangement that causes trouble is collecting an applicant’s Social Security number by text or email and typing it into a portal yourself. It creates a data breach exposure you have no reason to carry. LeaseRooster deliberately does not store a raw Social Security number for this reason: screening holds the application, the report you upload or receive, and the decision, while the report itself comes from your own agency.
Step 3: know what the report can and cannot contain
The FCRA puts time limits on adverse information. Under § 1681c(a), a consumer reporting agency may not report:
- Bankruptcies more than 10 years old
- Civil suits, civil judgments, and arrest records more than 7 years old, or until the governing statute of limitations has expired, whichever is longer
- Paid tax liens more than 7 years from the date of payment
- Accounts placed for collection more than 7 years old
- Any other adverse item more than 7 years old, other than records of criminal convictions
Convictions are the exception with no time limit in the federal statute. That is a federal floor, and several states cut it shorter for tenant screening, which is one of the reasons criminal history deserves its own read: what the law allows on criminal background checks.
Knowing the limits is useful for a reason beyond compliance. If a report hands you a twelve-year old collection account, the report is wrong, and a report that is wrong about one thing is worth checking on the others.
Step 4: read it against your criteria, not against your instinct
Open the written criteria next to the report and go line by line. Income multiple. Credit floor. Automatic declines. Rental history. Mark each one met or not met.
This sounds fussy and it is the entire point. A report contains far more information than your criteria ask about, including information you are not allowed to decide on, and reading it without a checklist is how irrelevant details start doing work.
Watch for identity mismatches while you read. Tenant screening reports are frequently assembled by matching names, and common names collect other people’s records. If a report shows an address or a judgment the applicant does not recognize, treat that as a possible mismatch and ask, rather than as a lie.
Step 5: verify the things the report does not cover
A consumer report is a record of credit and public records. It is not a record of tenancy. It will not tell you whether rent arrived on time, whether the unit came back clean, or whether notice was given properly.
Those come from people. Call the current and prior landlord with the same questions each time (here is the list), and verify income against documents rather than against the number written on the form (how to do that).
Step 6: send the notice when the report drove the outcome
If a consumer report contributed to a denial, a higher rent or deposit, or a co-signer requirement, you owe the applicant an adverse action notice. The FTC’s guidance for landlords is explicit that the notice is required even if the report was not the primary reason for the decision, and it lists what the notice contains: the agency’s name, address, and phone number, a statement that the agency did not make the decision, and notice of the right to dispute the information.
Use a credit score in the decision and there is more. Additional obligations attach, including disclosing the score, its source, its date, the range, and the key factors that adversely affected it. Adverse action notices works through the whole set.
Step 7: keep the file, and keep it out of circulation
Store the report with the application and the decision, restrict who can see it, and do not forward it to anyone. A consumer report is defined by § 1681a(d)(1) as information from a consumer reporting agency bearing on creditworthiness, character, general reputation, personal characteristics, or mode of living. Passing that around because a friend has a unit to fill is not a favor. It is a use with no permissible purpose behind it.
How long to keep it is a judgment call your state may make for you. A common practice is to keep the file for the length of the tenancy plus the statute of limitations on a fair housing claim, then dispose of it securely.
This is general information, not legal advice. Rules change and local ordinances vary. Confirm current requirements with your city, county, or an attorney before you act.