As of July 21, 2011 a firm using a “credit score” in the rental screening process that takes an adverse action against a rental applicant may have a new disclosure obligation.  The Dodd-Frank Wall Street Reform law (P.L. 111-209) expanded the Fair Credit Reporting Act’s adverse action notice requirements to include the disclosure of the credit score. 

The term “credit score” is defined in statute and is generally limited to those scores used in the loan application process.  If you or your resident screening service provider use a credit score and take an adverse action, you must comply with this new notice requirement.  Importantly, if you or your resident screening company do not use a credit score as defined, but use a scoring model specific to the rental decision, i.e., one not used in the loan process, then it is likely that you will have no additional notice obligations. 

This guidance highlights the key elements of the new credit score disclosure obligations.  NMHC/NAA encourage you to discuss this new rule with your provider and counsel to determine applicability to your specific rental screening process.