There is a great deal of discussion in the rental housing industry regarding the pros and cons of “portable” tenant screening reports – a single tenant credit check, for example, made available to multiple prospective landlords. Tenant advocates like the idea and have long sought a portability mandate – legislation to require landlords to accept such reports. The appeal (to advocates) is that low income and other hard to place applicants often pay multiple tenant screening fees before finding a landlord who will accept them – a hardship they can ill-afford.
A portability mandate, in theory at least, solves this problem by making it possible for applicants to pay for a single tenant screening report and use it with multiple landlords. But there are problems with this approach.
First of all, landlords, as a group, are strongly opposed to a portability mandate – even those willing to accept such reports! Their concern is that they will be required to accept reports from tenant screening services they do not know or trust – tenant screening companies that vary dramatically in their methods and screening reports that vary equally dramatically in content and quality. Then, of course, there is the question of authenticity.
One answer proposed by advocates to address the authenticity concern is to require tenant screening companies to deliver reports directly to additional landlords when requested by applicants. But there is a problem with that approach – one that goes beyond the objections of landlords and obvious cost considerations.
Portability and the FCRA
The federal Fair Credit Reporting Act (FCRA) states that a consumer reporting agency (e.g. a tenant screening service) may only furnish a consumer report to “end-users” (landlords for example) for specific “permissible purposes”. One such purpose is “…a legitimate business need for the information… in connection with a business transaction that is initiated by the consumer.” An application to rent falls within the scope of this purpose. But the FCRA goes on to say that “Every consumer reporting agency shall maintain reasonable procedures designed to avoid violation of [the permissible purpose requirement]” and further that “Each consumer reporting agency is required to make a “…reasonable effort to verify the identity [and certify the permissible purpose] of [each] end-user.” In practice this “certification process” is quite involved, making it impractical (for landlords & the tenant screening services) to enable delivery of a single (or even occasional) tenant screening report.
Direct-to-Consumer Tenant Screening Reports
A new breed of tenant screening report – the direct-to-consumer tenant screening report – has emerged. These innovated new products, pioneered by Moco Incorporated under the MyScreeningReport.com® brand, are inherently portable. Applicants have every right under the FCRA to order screening reports on themselves – including tenant credit and background checks. It is their data and they can use it as they see fit – including sharing access with prospective landlords in ways that assure authenticity.
There is concern by some in the advocate community, however, that applicants will purchase a portable tenant screening report only to find that landlords will not accept them. But in practice, applicants learn of these products through landlords who will accept them – either exclusively or optionally. There is no guarantee, of course, that the landlord will accept the applicant once they review the report. Still, if the applicant is denied, they have something of value. They walk away with their own tenant screening report, which they can then review with others to determine whether they qualify before parting with additional screening fees (if any)… thereby limiting the number of fees paid to two… certainly better than the 3-6 fees often sited by advocates.
Direct-to-consumer tenant screening reports – when combined with statutes (in Washington for example) requiring landlords to advise applicants of their rental criteria up front – go a long way to minimize the number of screening fees required of low income and other applicants – substantially weakening the argument for a portability mandate – a bad idea on many levels. At the same time, these direct-to-consumer products address the very real need of independent rental owners for occasional access to quality tenant screening products.