Yesterday I received a call from a potential customer who was working on a new business concept for his area, which he likened to a Renter Resume. He was very excited to find our Tenant Screening product options and learned he could be up and running with a myriad of background reporting options for his clients who were seeking to be pre-qualified for rentals in his competitive market. I’ve heard of plenty of rental agencies but thought he must not have any in his area and was happy we could assist him. I just assumed he had developed a Criteria for Residency and was planning on pre-qualifying potential renters so they could tell Landlords “Hey, I’m pre-qualified by XYZ!”
Then he said “It will be great! I will basically pull the reports and let the applicant attach them to their resume to give to potential landlords...” Uh-oh. Red flag. I had to interrupt him and let him know that this was a big No-No. Credit Bureaus who supply consumer data to a screening company that in turn resell it to a 2nd party do so with the understanding that the reports are not to be shared with anyone further. Period. By giving the report to an applicant or potential landlord (or anyone not directly connected to your business office), you have broken the golden rule of credit sharing. (If you want the whole kit-n-kaboodle, head to the Fair Credit Reporting Act.)
The only exception to this rule is you are able to share with the consumer that a report contains information that negatively impacts their ability to rent from you. In this event, we suggest that our customers inform the consumer that under federal law, consumers are entitled to get a copy of their personal credit report within 60 days of the adverse action. All they have to do is contact contact the consumer reporting company for details.
(You might ask, “Then why not just have the tenant pull their own credit and hand it out?” For those trusting souls, you should read my “How To Avoid Applicant Scams” article. ‘Nough said.)
After I shared this information with this potential new customer of ours, he quickly got off of the phone with me. I have a feeling he is going to move on and find another service and do just as he was planning, but not disclose his end intentions. It’s unfortunate because he is putting his new company at financial risk. At the old saying goes... you can lead a horse to water...
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Janell is a member of Rentec Direct, a web-based property management software program designed to help streamline tenant criminal and credit checks and the day-to-day operations of landlords and property managers. You'll find many other useful articles like this on the Rentec Direct Blog.
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