Renting & Credit Reports

Last updated: November 2, 2009 – 2:38 PM

Credit reports contain “information” about where you live and work and your bill paying habits; it may also state whether there has been an eviction or arrest. Landlords have the right to charge for credit reports.   Many landlords pay credit agencies for reports.   A landlord may also track credit themselves, by contacting banks, credit card companies, and checking court files for lawsuits or bankruptcies.   Either way, the landlord can charge a non-refundable fee for the check.

Landlords can set whatever credit standards they want.   They must hold that standard to all applicants.   If they do not, they may be charged with discrimination.   Some landlords may accept an applicant with a poor credit history by charging a larger security deposit or requiring a cosigner.   The cosigner is fully responsible for the costs of the apartment.

How to get your credit report?
If someone is denied housing because of a credit check, the Fair Credit Reporting Act requires that the landlord supply the name and address of the credit agency used.   If contacted within 30 days, the agency must supply the tenant with the report for free.

How to fix errors on your report?
The Fair Credit Reporting Act gives you the right to dispute information on your credit report.   Write a letter to the credit agency.   Clearly identify the items you dispute, and request deletions or corrections.   Include copies of any thing that may support your claim, such as a receipt for rent.   Send the letter certified mail and keep a copy.

If the agency feels no change to your report is necessary, file a statement of up to 100 words explaining your side of the story.   The credit agency must include this statement any time it sends out your credit report.   If you feel the agency did not properly investigate your dispute, file a complaint to the Federal Trade Commission or the States Attorney.

What collectors may and may not do
The Fair Debt Collection Practices Act bans certain types of debt collection and applies to anyone who collects debts for others.   This includes property managers and lawyers.

A collector may not contact you at unreasonable times or places.   This may include your place of work.   A collector may not tell anyone else that you allegedly owe money.   Harassment is illegal.   They may not repeatedly use the telephone to annoy you, threaten you or use obscene language.   Debt collectors may not falsely imply that you committed a crime or will be arrested for not paying.   Debt collectors may not garnish wages or property without a court judgment.

How to stop a debt collector?
If you believe a debt collector has violated the law, you have the right to sue in state or federal court.   You may recover damages, court costs, and attorney fees if you win.   Whether or not you sue, you should report any problems with a debt collector to the States Attorney and the Federal Trade Commission.   Once a collector receives a letter telling them to stop contacting you, they may only contact you to say that there will be not further contact or regarding a specific action.

Thanks to the Ann Arbor Tenants Union for the credit information

All 5 Comments

  1. My landlord foreclosed and I now have a case in building court through no fault of my own! Now Im having a problem finding an apartment!

    1. From your comment, I am a little unsure as to the details of what is happening. The law regarding foreclosure is that the bank must provide you with a 90 day notice. As long as you are current in rent the bank cannot throw you out before that. I am not sure what your problem is with finding a unit. If there is an eviction on your record as a result of the foreclosure, you can call the Lawyers Committee for Better Housing. They have a renters in foreclosure program and may be able to help with that. Their number is 312-347-7600.

  2. You can always add a note to your credit report as well as dispute it and that involves removing entries.

    The Federal Trade Commission recently issued a “Facts for Business” guide to help landlords comply with the federal Fair Credit Reporting Act (FCRA). “Using Consumer Reports: What Landlords Need to Know” provides guidance for residential property owners who use reports from credit bureaus and tenant screening services in deciding whether to rent to consumer applicants.

    Section 615(a) of the FCRA requires landlords, when they take an “adverse action” against a rental applicant based in any way on a “consumer report” from a “consumer reporting agency,” to provide an adverse action notice to that consumer. In particular, the law requires landlords to provide tenant applicants with a notice that informs them about the adverse action, identifies the consumer reporting agency that provided the report that contributed to the landlord’s action, and specifies consumers’ rights under the FCRA.

  3. Another facet of the same situation is that Retaliation, such as noted in the example set forth above, is prohibited under section 5-12-150 of the RLTO. Once positive step would be to require the Judges in the eviction division to FIRST have a hearing on retaliation if such a defense is alleged by a tenant who has been sued for eviction. If retaliation is found then, as per section 5-12-150 of the RLTO, the tenant is entitled to have the case dismissed, and receive damages equal to two times the rent or twice the actual damages sustained by the tenant, and the tenant’s attorney’s fees are to be paid by the landlord!

    This remedy or concept has been in place, indeed, since the RLTO became the law in 1986, but such is not the practice in the Courts in Chicago.

    Then, the Court order dismissing the case should and could make it clear that the case was not to have been filed and that no negative inferences are to be drawn from the MERE filing of the complaint by the landlord.

  4. We have a very grave problem here, folks…assume the following:

    A residential tenant’s apartment is covered by the RLTO. The landlord fails to make significant repairs and so the tenant sends the landlord a 14-day letter under section 5-12-110(d) of the RLTO, and does it right. The landlord does NOT make any repairs and so, as allowed by the RLTO, the tenant reduces the rent by the “stated amount” — assume for purposes of this example that the reduction in rent is fair.

    The landlord sends the check for the lesser amount back to the tenant along with a five-day notice for alleged failure to pay the proper amount of rent – the full amount. The tenant stands his or her grounds and re-tenders the reduced amount check, but after the five days goes by, a few days later the landlord files an eviction action!

    Even when the tenant alleges the defense of retaliation in the eviction case and gets damages from the landlord due to the landlord’s retaliatory action, the fact is that there is a RECORD that this tenant was sued in the eviction courts!

    So, the tenant did everything right, including proceeding under the RLTO, but nevertheless in our so-called “modern” society, the tenant possibly gets a black-mark against the tenant just because of the mere filing of the eviction action……this borders on insanity and is a situation that needs public outcry, amendments to the RLTO, and litigation by aggressive lawyers who should file lawsuits or claims against landlords who so endanger, undermine and impair the credit scores of innocent members of the public.

    Anyone for a task force on such an issue?

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