FTC Facts for Business - Using Consumer Reports: What Landlords Need to Know

Sep 15, 2026

Uploaded by Callum

Guidance for landlords on using consumer reports in rental decisions while complying with the Fair Credit Reporting Act (FCRA). Explains what constitutes a consumer report, the types of agencies that prepare them, and when reference checks fall under the FCRA. Covers adverse actions and the adverse action notice requirements, including required CRA contact information, statements about CRA non-decision-making, and notice of the right to dispute and request a free report within 60 days, with examples.

LanguageEnglish

CategoryForms

FormatPDF

Pages4

Reading Time2 min

AccessFree to download

Using Consumer Reports: What Landlords Need to Know

What is a Consumer Report?

What is an Adverse Action?

The Adverse Action Notice

Case Examples

BUSINESS FEDERAL TRADE COMMISSION FOR THE CONSUMER 1-877-FTC-HELP [www.ftc.gov](www.ftc.gov) FTC FACTS for Business Using Consumer Reports: What Landlords Need to Know Consumer Report Consumer Report Consumer Report f you’re a landlord, you may use consumer reports to evaluate I rental applications—as long as you follow the provisions of the Fair Credit Reporting Act (FCRA). The FCRA is designed to protect the privacy of consumer report information and to guarantee that the information supplied by consumer reporting agencies (CRAs) is as accurate as possible. The FCRA requires landlords who deny a lease based on information in the applicant’s consumer report to provide the applicant with an “adverse action notice.” What is a Consumer Report? A consumer report contains information about a person’s credit characteristics, character, general reputation, and lifestyle. A report also may include information about someone’s rental history, such as information from previous landlords or from public records like housing court or eviction files. To be covered Facts for Business by the FCRA, a report must be prepared by a CRA—a business that assembles such reports for other businesses. The most common typeof CRA is the credit bureau. Landlords often use consumer reports to help them evaluate rental applications. These reports include: • A credit report from a credit bureau, such as Trans Union, Experian, and Equifax or an affiliate company; • A report from a tenant-screening service that describes the applicant’s rental history based on reports from previous landlords or housing court records; • A report from a tenant-screening service that describes the applicant’s rental history, and also includes a credit report the service got from a credit bureau; • A report from a tenant-screening service that is limited to a credit report the service got from a credit bureau; and • A report from a reference-checking service that contacts previous landlords or other parties listed on the rental application on behalf of the rental property owner. Landlords often ask applicants to give personal, employment and previous landlord references on their rental applications. Whether verifying such references is covered by the FCRA depends on who does the verification. A reference verified by the landlord’s employee is not covered by the Act; a reference verified by an agency hired by the landlord to do the verification is covered. What is an Adverse Action? An adverse action is any action by a landlord that is unfavorable to the interests of a rental applicant. Common adverse actions by landlords include: • Denying the application; • Requiring a co-signer on the lease; • Requiring a deposit that would not be required for another applicant; • Requiring a larger deposit than might be required for another applicant; and • Raising the rent to a higher amount than for another applicant. The Adverse Action Notice When an adverse action is taken that is based solely or partly on information in a consumer report, the FCRA requires you to provide a notice of the adverse action to the consumer. The notice must include: • the name, address and telephone number of the CRA that supplied the consumer report, including a toll-free telephone number for CRAs that maintain files nationwide; • a statement that the CRA that supplied thereport did not make the decision to take the adverse action and cannot give the specific reasons for it; and • a notice of the individual’s right to dispute the accuracy or completeness of any information the CRA furnished, and the consumer’s right to a free report from the CRA upon request within 60 days. Disclosure of this information is important because some consumer reports contain errors. The adverse action notice is required even if information in the consumer report Facts for Business was not the main reason for the denial, the increase in security deposit or

FAQs

What counts as a consumer report under the FCRA for landlord use?

A consumer report includes information about a person’s credit characteristics, character, general reputation, and lifestyle, and may include rental history from prior landlords or public records. To be covered by the FCRA, the report must be prepared by a consumer reporting agency (CRA).

When must a landlord provide an adverse action notice?

When an adverse action is taken based solely or partly on information in a consumer report, the landlord must provide an adverse action notice. This applies even if the consumer report information is only a small part of the overall decision or affects actions like rent increases or deposit changes.

What must be included in an adverse action notice?

The notice must include the CRA’s name, address, and toll-free telephone number; a statement that the CRA did not make the decision and cannot provide the specific reasons; and a notice of the individual’s right to dispute information and to request a free report within 60 days.

Sep 15, 2026

Uploaded by Callum