Fair Credit Reporting Act (FCRA) violations can cost you—in more ways than one. Aside from the potential costs associated with a violation, lax standards in the leasing office can also allow criminal offenders to slip through the cracks and into your community. But let’s not forget that the goal of the leasing office is not to turn away renters—the goal is to welcome them home.
Rather than err on the side of caution or aggressively approve renters of questionable merit, property managers need to strike a balance between protecting themselves from FCRA violations, and the need to fill vacancies with qualified renters.
As a multifamily resident screening pioneer, On-Site has spent the last decade building and refining the industry’s most full-featured screening solution. From the beginning, we’ve placed special emphasis on creating solutions designed to aid managers in meeting the day-to-day challenges being faced out in the field.
Along the way we’ve learned a few things about resident screening, which we’ve compiled into the following list of best practices to help you avoid FCRA violation risk while closing leases.
- Don’t leave anything to chance. You set the standard for who lives in your community, not fate. Accomplish this by setting rental criteria that matches your unique business priorities.
- Reduce subjective decision-making at the community level. Use automatic approvals based on your company’s rental criteria to simplify the move-in process and reduce individual decision-making, thereby reducing fair housing violation risk. Reserve manual approvals for borderline applicants and restrict the ability to perform them to authorized users.
- Know your applicant. Identity verification should be part of the screening process to reduce mixed files and costly re-screenings due to incorrect applicant information.
- Separate criteria for applicants and guarantors. Bad applicants should not be buried under exceptional guarantors. After all, the
guarantor isn’t the one who’ll be living in your community.
- Have your provider, not leasing staff, deal with disgruntled applicants. What happens when an applicant has an issue with his rental report? Pick a screening company that is willing to speak with applicants who dispute information on their rental reports. This allows you to approve more applicants that would have otherwise been turned away due to incorrect credit report data.
- One size doesn’t fit all. Screening criteria should be suited to the unique needs of each community in your portfolio. Tailor your criteria to meet market conditions at the individual community level or across regions.
- Special considerations for foreclosures and mortgages in default. In light of the economic recession, you may want to make special considerations for applicants that have otherwise sterling credit, marred only by a mortgage in default or past foreclosure.