The New Rules
Governing Credit Reports

Last year, the credit bureaus made a number of changes which affected both providers and end users of credit reports.  These changes became necessary because of the exploding problem of identity theft and new federal legislation intended to combat it. 

REPORTS CATEGORIES
Before we describe the changes we should first define tenant screening reports.  These reports fall into two major categories.  The first is Credit Reports and the second is all other reports.  This second category includes Criminal Histories, Eviction Histories, Residential Histories, etc.  The changes outlined below effect only Credit Reports.  There are no registration or inspection requirements for any of the “other” reports.

REGISTRATION
All end users must register with the credit bureau.  Registration is required only once and is fairly painless.  You complete an on-line form and fax a couple of documents to the Credit Bureau.  In about 24 hours you'll receive an email with your user name and password.  From that day forward you may order credit reports and other tenant screening reports at any time and receive them instantly at your own computer.  Payment is made by credit card at the time the reports are ordered.  (Click Here For Registration Page)
 
INSPECTION
A physical inspection of your office, performed by a representative of the Credit Bureau, is required if you want to see the complete and actual credit report.  The general purpose of the inspection is first to confirm that you really are who you claimed to be in the registration and second to confirm that you have good security in your office.  Generally this means locking file cabinets and computers, no credit reports lying on the kitchen table for all to see, that sort of thing.

The fee for the inspection can vary but is generally in the $75.00 range.  If you have a commercial office the inspection is required only once.  Unfortunately, if you have a home office it must be inspected every year.  There are two attractive alternatives.

NO INSPECTION
If you order a credit report but have not been inspected you will receive a report called an “Instant Decision”. This is based on a computer algorithm called "Automated Decisioning" (See Sample) which analysis of the actual credit report and converts it to a graphic of a a traffic signal, where green means a good report, red means a bad one and yellow, somewhere in between.  For many landlords this is enough information to make an informed decision when attempting to verify the information given in the application and rental interview. 

ROLL YOUR OWN
A second and increasingly attractive option is to have the rental applicant purchase their own credit report.  In this case, there is no need for Registration or Inspection because you are not obtaining the report the applicant is and he is merely letting you look at it.

A word of caution here, we recommend the credit report be obtained in your presence.  It’s just too easy for the applicant to get his credit report, pop it into a word processor and “clean things up a bit”. 

Tenant screening is the only way a landlord can keep known bad tenants out of his property.  While the process of learning if a rental applicant pays his bills or not isn’t as easy as it used to be, the alternative is inconceivable:  giving the keys to just anyone.  If you do that, the probability that you will loose thousands of dollars is almost a certainty.