The problem with rental applications

Prospective tenants pay a lot in application fees only to be met with inaccurate background checks.

Moving sucks.

The problem with rental applications

Making matters worse, a report from the Consumer Financial Protection Bureau (CFPB) found tenant screening reports are often inaccurate.

How it works

In the US, prospective tenants pay an average of $40-$59 to apply for an apartment, and don’t get reimbursed if they don’t get it.

Landlords use the fee to cover background checks from tenant screening companies, which include applicants’ employment, rental, financial, and criminal histories.

The issue

CFPB handled 26.7k+ complaints related to tenant screenings between January 2019 and September 2022. Of those, ~65% cited incorrect info on a report.

For example, one applicant said their twin brother’s criminal history appeared on their report. Another said the report surfaced an eviction that never happened.

Mistakes often occur when companies use name-only matching without other identifying info, like a Social Security number. Other issues:

  • Companies can reveal expunged or sealed records
  • Companies sometimes report evictions that were filed, but not completed

This inaccurate info can cause applicants to lose housing opportunities, time, and money.

And fixing it it is a pain

The Fair Credit Reporting Act requires landlords to tell applicants if they were denied due to info obtained in a report… but many don’t.

And when they do, the onus to dispute the report falls on the applicant in a process that can be “hopelessly inefficient and needlessly confusing,” per CFPB.

Some applicants found themselves being bounced between companies, while others failed to hear back at all.

The FTC has promised to work with the CFPB to hold companies accountable.

But for now: You can find consumer resources at the end of the report.

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