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FAIR CREDIT REPORTING ACT REQUIRES LANDLORDS TO SEND APPLICANTS ADVERSE ACTION DISCLOSURES

 FAIR CREDIT REPORTING ACT REQUIRES LANDLORDS TO SEND APPLICANTS ADVERSE ACTION DISCLOSURES

We represent consumers with credit report errors and background report disputes under the Fair Credit Reporting Act.  The Fair Credit Reporting Act (FCRA) requires landlords who take adverse action (i.e., turn down a rental applicant) against a consumer that is “based in whole or in part” on information contained in a consumer report to provide notice of the adverse action to the consumer.

The Dodd Frank Act Consumer Protection Act amended the FCRA and requires landlords to disclose in writing or electronically the numerical credit score used when taking the adverse action “based in whole or in part” on information contained in a consumer report.  A credit score is a numerical value or categorization derived from a statistical tool or modeling system used by a person who makes or arranges a loan to predict the likelihood of certain credit behaviors, including default (and the numerical value or the categorization derived from such analysis may also be referred to as a “risk predictor” or “risk score” (FCRA §609(f)(2)).

Examples of the credit scoring models used by Equifax, Experian and Trans Union:

  • Equifax Beacon 5.0:               Scores range from 334 to 818
  • Experian Fair Isaac V2:          Scores range from 320 to 844
  • Trans Union Classic FICO:     Scores range from 309 to 839

Landlords that review consumer reports and make an adverse action decision “based in whole or in part” on information in the consumer report that includes a credit score must provide written or electronic disclosure of specific information about the credit score with the written or electronic adverse action notice.  The adverse action disclosure from the landlord must include the following information: the numerical score; score range; score factors; score date and source of the score.

Have you received an adverse action letter from a potential landlord?  Did the disclosure include your credit score, score range, score factors and the source of the score?  Do you have questions about your credit report or about your housing background check?

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