Fair Credit Reporting Act (FCRA)
and
Fair and Accurate Credit Transactions Act (FACTA)
The Fair Credit Reporting Act , commonly referred to as the FCRA, strictly regulates the obtaining of and use of credit information under federal law. Owners must also be familiar with the FACTA (Fair and Accurate Credit Transactions Act) that deals with identity theft issues.
The most important point for property owners, in this legislation, is that you cannot run a credit report on anyone unless you have their written permission. You should get the written permission of every adult applicant as part of the application process. Furthermore, you must have a legitimate business reason to run a credit check on someone. This means you cannot run a credit check on you or your friends “just to see what it says”. Each inquiry is documented and will show up on the report for as long as a year. You cannot hide your inquiry. Make sure that only legitimate business inquiries are made under your name. Abuses can lead to termination of your contract with your credit vendor and possible penalties and fines. In a recent change to the law, individuals are permitted to check their own credit history annually without cost, or consequence, primarily to spot possible traces of identity theft.
In California, state law requires that you supply your applicant with a copy of whatever report(s) you have received persuant to your inquiry, if the applicant requests a copy. A sample brochure explaining applicant’s rights under the law can be purchased and immediately downloaded from the MyRentalUnits.com forms store.
If you make a decision regarding the extension of credit with the use of credit information, you must document in writing the denial of credit or any change in terms of the credit provided. The easiest way to this is through the use of a standardized form letter . A form letter is available from the MyRentalUnits.com forms store.
Are Landlords subject to the Fair Debt Collections Practices Act (FDCPA)?
We are drafting content on this issue. In the interium, please visit a Landlord2Landlord article on this issue. Landlord2Landlord is a property owner credit reporting service. The site contains many articles on credit reporting issues.
Last Revision Date: 08.08.2009