Landlords Take Tenant-Screening Beyond Credit Check

Anyone who’s tried to buy something on credit has heard the horror stories about credit report errors.

Smart consumers make sure their credit reports are accurate by ordering a copy from at least one or more of the major credit reporting systems, Experian (formerly TRW), Equifax or Trans Union.

But if you’re shopping for an apartment instead of a car, you need to understand that there’s more to tenant screening than just the standard credit report, known in the consumer-reporting industry as the “retail” report.

Recently a reader asked the following question, getting to the heart of the matter:

“I am unable to rent an apartment mainly because of an eviction on my record. I was evicted because of a family illness and major surgery. I recently received copies of my credit report from all three credit bureaus. I was surprised to find no record of an eviction.

“One landlord also told me that I owed my former landlord money. But I didn’t see this on my credit report either.

“Where do landlords see this information, and how can I get an apartment with the eviction on my record?”

Whether you like it or not, when you fill out your next rental application, your landlord will probably run a credit check on you.

In the old days, your landlord might have been satisfied with your retail credit report, which usually contains information about your credit cards and car loans but nothing about your rental history.

But times have changed. Nowadays, landlords work with consumer-reporting agencies that specialize in “resident screening,” a much more in-depth probe of a tenant’s personal history. It might include prior evictions or negative landlord references.

“Our reports contain your history as a tenant, just like a credit report shows your history as a borrower,” says Edward Byczynski, president and general counsel for the National Tenant Network Inc., a nationwide tenant-screening agency based in Oregon (https://www.ntnnet.com).

“They contain public record data on evictions as well as lease violation information.”

Your prospective landlord can even pay an agency to search for any possible criminal history in your background, though few landlords do this because of the expense and legal complications that can arise.

Why are landlords paying more money for such information?

“There’s a lot of creative writing on applications,” said Gene Gayda, landlord and president of the New Hampshire Property Owners Assn., which maintains a landlord-tenant law Web site (https://www.nhpoa.org).

“In the past, tenants could float a good story, and most landlords weren’t sophisticated enough to check up on it. Now, as more and more landlords are getting on the bandwagon and using these services, it’s changing the rules.”

Tenant-screening services provide landlords with information they can’t easily obtain themselves; the information can be faxed to the landlord within an hour.

Most landlords pass on the cost of the reports to tenants by charging application fees.

“Landlords are doing a lot more screening,” said Jennifer Strawn, staff vice president of member services for the California Apartment Assn. “We recommend that landlords get a combined report that includes a search for evictions and not just a retail credit report.”

What does this mean for renters?

If you’re the type who always pays your rent on time and has never had a dispute with your landlord, you’ll probably pass your credit check. But what if there’s a mistake on your report?

With local agencies in every part of the country, it’s nearly impossible to review your records in every database in the nation. Even locally there may be five or more of these agencies keeping different sets of data, a credit reporting nightmare should a mistake turn up.

Luckily for renters, however, the Fair Credit Reporting Act requires landlords to tell you which consumer reporting agency they used if they rejected you because of something on the report. You then have the right to get a free copy of the report if you request one within 60 days of the rejection.

Getting a free copy probably won’t help you get back the apartment you just lost. But at least you’ll be better informed the next time you apply for an apartment. And if there are mistakes on the report, you can make sure they’re corrected so you won’t face the same problem again.

A recent trend in the industry, meanwhile, is making it tougher for tenants to hide problematic renting histories. Reporting agencies that provide resident screening are consolidating across the nation, said Norm Magnuson, vice president of public affairs for the Associated Credit Bureaus Inc., the credit reporting industry group in Washington, D.C.

“It’s similar to where retail credit reporting was in the late ‘60s,” Magnuson said. “The industry was dominated by regional bureaus. But they needed a more comprehensive nationwide system.

“That’s the movement in the tenant-screening area. If a tenant has worked his way across the country by skipping out on landlords and not paying rent, landlords want to know that.”

Companies like the National Tenant Network have always worked on a national scope. Others, like First American Registry based in San Diego, are in the process of buying regional companies throughout the country to provide nationwide service.

As more companies like First American Registry expand their databases nationwide, tenants will find it increasingly difficult to cover up a bad rental history by moving to a new region of the country.

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Next: More advice on how to get an apartment if you have a black mark on your record.

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Leta Herman is a syndicated columnist. Questions on any aspect of apartment living can be addressed to lherman@shaysnet.com or Leta Herman, care of Inman News Features, 1250 45th St., Suite 360, Emeryville, CA 94608. Distributed by Inman News Features.