Check out our 3 Step Guide to Denying an Applicant. It provides a quick, basic view towards complying with the law when denying an applicant.
Complying with the federal and state regulations avoids lawsuits and provides applicants their rights under the law. We have included samples of the required notices. You may provide the notices to the applicant by paper copy or electronically. Many tenant screening agencies such as applycheck can provide these forms through their online systems as part of their services.
Step 1: Before you Order a Report
- Provide the Applicant A Summary of Your Rights Under the Fair Credit Reporting Act.
- Have the applicant sign the Disclosure and Authorization Form.
Step 2: Pre – Adverse Action Notice
Before you reject a sales or rental application based on information in a consumer report, you must give the applicant:
- a notice that includes a copy of the consumer report you relied on to make your decision; and
- a copy of A Summary of Your Rights Under the Fair Credit Reporting Act,
Providing the notice in advance provides the applicant an opportunity to review the report and tell you if it is correct. See attached sample.
Step 3: After you take an Adverse Action
If you take an Adverse Action based on information in a consumer report, you must give the applicant a notice of that fact, in writing or electronically. See attached sample.
An Adverse Action Notice tells people about their rights to see information being reported about them and to correct inaccurate information. The notice must include:
- the name, address, and phone number of the consumer reporting company that supplied the report;
- a statement that the company that supplied the report did not make the decision to take the unfavorable action and can’t give specific reasons for it; and
- a notice of the person’s right to dispute the accuracy or completeness of any information the consumer reporting company furnished, and to get an additional free report from the company if the person asks for it within 60 days.
- If the Applicant replies to your Adverse Action Notice and disputes the accuracy of the report, you must investigate their reasons (i.e. Identity Theft, Incorrect Data, etc).
Question: Does the FCRA require that the property management company/ community association or landlord provide an explanation to the applicant about which part of a consumer report influenced the adverse decision? No. They are not required to provide a more detailed rationale for the decision and should not share such rationale with the consumer reporting agency.
Sample Letters
Here’s our 3 Step Guide to Denying an Applicant sample letters.
Pre Adverse Action Letter – Sample
As the user of consumer reports, it is your responsibility to ensure compliance with all of the relevant federal, state and local laws governing this area. This information is not legal advice and we recommend consulting with an attorney.
Date: ____________
Applicant Name:
Address:
City, State Zip:
Dear Applicant:
A decision is currently pending concerning your rental/sales application at
_________________________________________. We are forwarding a copy of the consumer report that you authorized in regard to your rental/sales application, together with “A Summary of Rights Under the Fair Credit Reporting Act.” The contents of the enclosed report are currently under review in consideration of your application.
In accordance with the Fair Credit Reporting Act, consumers have the right to challenge inaccuracies and incompleteness of the information contained in the report(s). If you wish to dispute the accuracy of the information in the report, you should contact our office within ten calendar days from the date of this letter. We will investigate the discrepancy and review the corrected information prior to a final decision regarding your tenancy. You may also contact the consumer reporting agency directly (i.e., the source of the information contained in the report.) Applycheck, LLC only provided us the consumer report and plays no part in the decision to take any action on your application. Applycheck, LLC is unable to provide you with specific reasons for any decisions to be made.
Applycheck, LLC
516 N Charles Street
Suite 311
Baltimore, MD 21201
If the report is a credit bureau report, you may contact the credit bureau that furnished the report:
Credit Bureau Contact Information
Adverse Action Letter – Sample
As the user of consumer reports, it is your responsibility to ensure compliance with all of the relevant federal, state and local laws governing this area. This information is not legal advice and we recommend consulting with an attorney.
Date: ____________
Applicant Name:
Address:
City, State Zip:
Dear Applicant:
We regret to inform you that based on our tenancy criteria, we are unable to consider you further for residency at our property. This decision was made in part from the information we received from Applycheck, LLC, our residential screening vendor. Applycheck, LLC does not make these decisions and is unable to provide you with the specific reasons for them.
In accordance with the Fair Credit Reporting Act, you have previously received a copy of this information and a copy of your rights under the Act. You also have the right to obtain an additional free copy of the report within 60 days of your receipt of this letter by contacting the supplier at the addresses and telephone numbers below. Please refer to these documents if you have further questions. You have the right to dispute the accuracy or completeness of the information contained in the report(s) by contacting Tenant Screening Company.
Applycheck, LLC
516 N Charles Street
Suite 311
Baltimore, Maryland 21201
If the report is a credit bureau report, you may contact the credit bureau that furnished the report:
Credit Bureau Contact Information
Important Notification: Applycheck, LLC cannot provide legal advice. The information contained herein is for awareness and should not be considered as legal advice. Applycheck, LLC recommends that you consult with legal counsel in regard to this document and your specific screening program, policies and procedures to ensure legal compliance.