OSPIRG's Renters Handbook:
Chapter 1

Chapter 1: Finding a Place to Live

B. Credit Checks

Many landlords will check your credit history to see if you have paid your bills on time.

Tip: Tenants should get a copy of their own credit report to verify that everything included is accurate before they apply for housing. (See Appendix C)

Credit bureaus collect information about you from various sources. Such information may stay on file for up to 10 years and may include:

• your name, current and former addresses, Social Security Number, birthdate, current and former employers, type of job, income, spouse information, and whether you rent or own your home;
• dates that you opened your credit accounts, or took out a loan, and the terms of the accounts;
• attempts to get credit, car loans, insurance, mortgages, etc.;
• account balances, past due amounts, how often you pay late;
• your biggest loan ever received and any limits on your credit card accounts;
• bankruptcies, lawsuits, court judgments, liens, or repossessions.

If you are refused housing because of information on the credit report, you may obtain a free copy of your report within 30 days by requesting it in writing from the credit bureau. You may then submit a personal letter of explanation, or your story, to your file. If the landlord charged an initial screening fee, he should have already provided the name and address of the credit bureau under the Federal Fair Credit Reporting Act.

C. Tenant Screening Services

Some landlords use a tenant screening service to help them select tenants. These services not only have access to your credit history, but may also be linked to a data base that can access the courts records of evictions, divorces and small claims activities.

To save money, you should ask land-lords if they have screening criteria for applicants. Be sure that you can pass the criteria before paying an
application or screening fee.

Warning: A landlord who doesn t screen may accept a person with poor credit, but may also have a lower standard of care for their properties.

If you know that you won t meet the criteria, ask if the landlord will consider your explanations. Many landlords will adjust their criteria for an honest explanation. The landlord may, however, charge an additional deposit for the added risk.

Tenants should be honest and fill out all applications completely, neatly and accurately. Landlords can reject an application that is incomplete, inaccurate or falsified. They may also end a rental agreement after the tenant moves in if they find that the tenant gave any false information.

If a tenant is rejected because of a credit report, the landlord s only obligation is to tell the tenant the name and address of the agency.

Note: It is legal to reject a tenant simply because the tenant has been evicted in the past.

D. Application Fees

A landlord may charge a fee to cover the cost of processing the application, including running a background or credit check on potential tenants. (90.295)

The landlord may not charge a screening fee unless he gives a written notice of:

• what information will be obtained;
• the charge for the process;
• the applicant's right to dispute the information obtained;
• the name and address of the screening service or credit
  bureau.

An application fee cannot be charged if there is not a rental unit currently available. A fee or deposit cannot be charged to put you on a waiting list.

Application fees should be no more than the average, actual costs for screening. If, for any reason, the landlord does not perform the screening, he must refund the fee within a reasonable time.

Penalty: The tenant may sue in small claims court for the amount of the fee, plus $100 penalty and court costs if the landlord does not provide the applicant with a screening disclosure.

E. Reservation Deposit

If the landlord approves an application and an agreement to rent is reached, the landlord may require a deposit to ensure that the applicant will sign a rental agreement and move into the unit. (90.297(2))

The landlord must either refund the deposit when the tenant moves in, or apply it to the security deposit or first month's rent. The landlord must give the applicant a written statement of the terms of the agreement regarding the deposit, as well as how the deposit will be refunded or retained.

Penalty: If the rental agreement is not signed because of the applicant, the landlord may retain the deposit.

If the rental agreement is not signed because of the landlord, he has 4 days to refund the deposit by making it available at the landlord's place of business, or by mailing it first class. Failure to do so entitles the tenant to the amount of the deposit plus $100.


OSPIRG Renter's Handbook Table of Contents