To screen tenants, set written criteria before anyone applies, collect a full application with signed consent, run a credit and background check through a screening service, verify income and call prior landlords, and either extend a lease offer or send a proper denial notice. Every step is bound by federal law: the Fair Housing Act on who you can reject and why, the Fair Credit Reporting Act on how you use screening reports, and the FACTA disposal rule on what you do with the paperwork afterward.
Write Your Criteria Down First
Before you look at a single application, decide what a qualified tenant looks like. Common benchmarks include a minimum credit score somewhere in the 620 to 650 range and a gross monthly income of at least three times the rent. You might also set rules on pets, smoking, or maximum occupants. Fix all of it in writing before applications start arriving, so personal impressions never drive the outcome.
Consistency here is legal protection, not a preference. The Fair Housing Act prohibits refusing to rent based on race, color, religion, sex, national origin, familial status, or disability.1Office of the Law Revision Counsel. 42 U.S. Code 3604 – Discrimination in the Sale or Rental of Housing Enforce a credit score cutoff against one applicant and waive it for another, and if those two differ by a protected characteristic, you have the makings of a discrimination complaint. A signed, dated criteria sheet in your file is your best evidence if a denial is ever challenged.
What Fair Housing Law Allows You to Screen For
Federal law recognizes seven protected classes: race, color, national origin, religion, sex, familial status, and disability.2HUD.gov. Housing Discrimination Under the Fair Housing Act – Overview Many states and cities add age, sexual orientation, gender identity, marital status, or source of income (such as housing vouchers). A criterion that is fine federally can still violate a local ordinance, so check with your state or city fair housing agency before finalizing anything.
Criminal Records
Criminal background checks are a legitimate screening tool, but blanket policies that reject anyone with any record carry serious legal risk. HUD’s Office of General Counsel has explained that because arrest and incarceration rates differ significantly by race and national origin, overly broad criminal-record bans can violate the Fair Housing Act through disparate impact, even without discriminatory intent.
Two rules follow. You cannot deny based on an arrest that did not lead to conviction; an arrest alone does not prove an offense. And even conviction-based policies have to weigh the nature of the crime, its severity, and how long ago it happened. Screen for convictions that relate to actual safety or property risk, and give the applicant a chance to explain the circumstances before you make a final call.
Occupancy Limits
You can cap the number of occupants per unit, but the standard has to be reasonable. HUD generally considers two persons per bedroom reasonable under the Fair Housing Act.3HUD.gov. Fair Housing Enforcement – Occupancy Standards Statement of Policy More restrictive policies invite familial status complaints, particularly when the effect is to shut out families with children. Unusually large bedrooms or other livable space may push the reasonable number higher.
What to Collect on the Application
A thorough application gathers everything in one pass. At a minimum:
- Government-issued photo ID (driver’s license, state ID, or passport).
- Social Security number, so screening services can pull credit and match criminal records accurately.
- Employment details: current employer, job title, supervisor name, and phone number.
- Income documentation: two or three recent pay stubs for salaried workers; for self-employed or gig applicants, recent bank statements, IRS Form 1040 returns, or 1099s (1099-NEC, 1099-MISC, or 1099-K) from the past one to two years.
- Rental history: names and phone numbers for prior landlords covering the past two to three years.
Gig workers and freelancers are a growing share of the rental market, and demanding traditional pay stubs alone can screen out financially stable applicants. Two or three months of bank statements showing consistent deposits, paired with tax returns, tell you more than a single 1099.
Getting Written Consent
Before you pull a credit report or criminal background report through a screening service, get the applicant’s consent. Federal law requires anyone obtaining a consumer report to have a permissible purpose and certify it to the reporting agency.4Office of the Law Revision Counsel. 15 U.S. Code 1681b – Permissible Purposes of Consumer Reports The FCRA’s specific written-disclosure-and-authorization requirement technically applies to employment screening rather than tenant screening, but nearly every screening service requires signed applicant consent as a condition of running the report, and several states require it by statute. Use a standalone consent form that plainly states a credit report and criminal background check will be obtained and shared with a screening service, and have the applicant sign it separately from the main application.
Running the Reports
With a complete application and signed consent, you submit the applicant’s name, date of birth, and Social Security number to a screening service. The platform pulls data from credit bureaus, criminal databases, and eviction court records and returns a consolidated report, usually within minutes to 48 hours.
Screening services generally charge $25 to $75 per applicant, and many let the applicant pay directly through an online portal. Some states cap the fee, so check local rules before passing the cost along. Whatever you charge should reflect actual screening costs rather than serve as a profit center.
Reading the Results
The credit report shows outstanding debts, payment history, credit utilization, and public records like bankruptcies. Compare the score to the threshold in your written criteria, and read past the number: someone recovering from a single medical debt is a different risk than someone with chronic late payments across multiple accounts.
Criminal reports list conviction records from state and federal databases. Evaluate each record on its own facts rather than triggering an automatic rejection. Eviction records from housing courts often appear as well. Under the Fair Credit Reporting Act, screening agencies generally cannot report negative items older than seven years, including civil judgments and eviction filings. Criminal convictions have no federal time limit for reporting.5Office of the Law Revision Counsel. 15 U.S. Code 1681c – Requirements Relating to Information Contained in Consumer Reports Some states set shorter windows for both, so an older conviction may not appear depending on where you operate.
Verifying Income and References
Reports only tell part of the story. Call the employer to confirm the applicant still works there, when they started, and that the stated salary matches what the employer will disclose. For self-employed applicants, cross-reference the income documents against the bank statements. If the numbers diverge substantially, ask the applicant to explain before assuming the worst.
Prior-landlord calls surface things no report captures. Ask directly: Did the tenant pay rent on time? Did they leave the unit in good condition? Would you rent to them again? The last question tends to draw the most honest answers. Take notes on each call, including the date, who you spoke with, and what they said, and keep them with the application file.
One caution: a current landlord who wants a problem tenant gone has every reason to give a glowing reference. The landlord before the current one often produces more reliable information.
Making the Decision
Compare each applicant’s full file against your written criteria. If they meet every benchmark, send a lease offer. There is no federally mandated response timeline, but three to five business days is standard practice and keeps you from losing good candidates to other listings.
Denials and the Adverse Action Notice
If you reject someone based in whole or in part on information from a consumer report (credit, criminal, or eviction history from a screening service), federal law requires you to send an adverse action notice.6Office of the Law Revision Counsel. 15 U.S.C. 1681m – Requirements on Users of Consumer Reports The notice must include:
- The screening agency’s name, address, and phone number.
- A statement that the screening agency did not make the denial decision and cannot explain why the action was taken.
- Notice that the applicant can request a free copy of the report within 60 days.
- Notice that the applicant can dispute any inaccurate information directly with the agency.
The notice can be delivered in writing, electronically, or orally, though written delivery by email or certified mail gives you proof of compliance.7Consumer Financial Protection Bureau. What Should I Do if My Rental Application Is Denied Because of a Tenant Screening Report
If the denial has nothing to do with a consumer report, such as a bad prior-landlord reference you gathered yourself or an income-to-rent ratio that fell short, the federal adverse action notice is not required. Putting the reason in writing anyway is smart. It creates a contemporaneous record that helps defend against a fair housing complaint.
Conditional Approvals
Sometimes an applicant falls just short but not far enough to reject outright. You can approve them on conditions: a higher security deposit where your state allows it, a co-signer, or a shorter initial lease. If the conditional terms stem from information in a consumer report, you may still owe an adverse action notice on the original application terms. Document acceptance of the modified terms clearly in the lease.
Disposing of Applicant Data
Every application leaves you holding sensitive personal information: Social Security numbers, credit reports, criminal records. Federal law requires you to dispose of consumer report data in a way that prevents unauthorized access.8Federal Trade Commission. FACTA Disposal Rule Goes into Effect June 1 For paper, that means shredding, burning, or pulverizing. For electronic files, it means permanently deleting or overwriting so the data cannot be reconstructed.9Federal Trade Commission. Using Consumer Reports – What Landlords Need to Know
If you hire a third-party document destruction service, vet it: check references, ask about security certifications, and review procedures before handing over files. The disposal rule holds you responsible even when a contractor performs the destruction. For most small landlords, the simpler path is shredding paper applications right after a decision and deleting digital files from your computer and any cloud storage. Keeping a rejected applicant’s Social Security number on a laptop for months is exactly the risk this rule exists to prevent.