Tenant Screening: What Landlords Can and Can't Check (FCRA Guide)

Why tenant screening matters

A bad tenant can cost you thousands in unpaid rent, property damage, and legal fees. Tenant screening helps you make informed decisions, but it comes with legal obligations. The Fair Credit Reporting Act (FCRA) governs what you can check, how you can use the information, and what you owe the applicant in terms of transparency.

Getting this wrong can expose you to lawsuits. Getting it right protects your investment while treating applicants fairly.

What you can legally check

Under the FCRA, landlords using a consumer reporting agency (like TransUnion SmartMove) can access these reports:

Credit report: Shows payment history, outstanding debts, bankruptcies, and a credit score. Most landlords look for a history of on-time payments and manageable debt levels.

Criminal background check: Shows criminal convictions. Under federal FCRA rules, convictions can be reported indefinitely. Non-conviction records (arrests that didn't lead to conviction, dismissed charges) are limited to 7 years. Some states impose stricter limits.

Eviction history: Shows prior eviction filings and judgments from court records. Typically reported for up to 7 years.

Income verification: Some screening services offer income verification or estimates based on financial data, helping you confirm that the applicant can afford the rent.

What you cannot do

Blanket criminal denials: The Department of Housing and Urban Development (HUD) has stated that automatically denying all applicants with any criminal history may violate the Fair Housing Act due to disparate impact. You should evaluate each applicant individually, considering the nature of the offense, how long ago it occurred, and evidence of rehabilitation.

Use arrests without convictions: An arrest without a conviction should generally not be used to deny housing. The FCRA limits reporting of non-conviction records to 7 years, and HUD guidance discourages using arrest records as the basis for denial.

Skip the adverse action notice: If you deny an applicant based on information in a screening report, you must provide a written adverse action notice. This must include the name and contact information of the screening company, a statement that the company didn't make the decision, and the applicant's right to dispute the report and get a free copy.

Screen without written consent: You need the applicant's written authorization before ordering any consumer report. No exceptions.

Who pays for screening?

Most screening services let you choose whether the landlord or the applicant pays the fee. Many landlords pass the cost to the applicant (typically $25-47 per screening). Some states cap the amount you can charge applicants for screening fees, so check your local laws.

The most common approach: use a service like TransUnion SmartMove, enter the applicant's email, they complete the screening themselves and authorize the reports, and you receive the results. The applicant can be charged directly, meaning you pay nothing out of pocket.

What to look for in results

Rather than looking for a perfect record, focus on patterns:

• Consistent on-time rent payments in the past
• Income of at least 2.5-3x the monthly rent
• No recent evictions (last 3-5 years is most relevant)
• No active collections from previous landlords
• Stable employment history

A single late payment from 5 years ago is very different from a pattern of non-payment. Apply your criteria consistently to all applicants to stay compliant with fair housing laws.

Keep records of your screening decisions

Document your screening criteria before you start accepting applications, and apply it the same way to every applicant. If you're ever challenged on a denial, having a written, consistently-applied policy is your strongest defense.

RentalSlate helps landlords manage the full tenant lifecycle — from screening and onboarding to lease tracking and rent collection.