On this page
- What a tenant background check includes
- Permissible purpose and the applicant's consent
- What counts as adverse action
- Adverse action notice checklist
- Write the adverse action notice
- After the notice: disputes
- Keeping and destroying screening reports
- Application and screening fees
- Criminal records and HUD guidance
- Tenant screening background check, step by step
- Frequently asked questions
What a tenant background check includes
The FTC says tenant background checks can include rental and eviction history, credit history and criminal records, and it treats credit reports and risk scores as consumer reports too. A landlord background check, in practice, is a consumer report from a screening company plus your own checks: income, references and a call to past landlords. Published tenant screening prices run from $10 to $55, and a credit, criminal and eviction check costs $39.99 to $49 where companies itemize it; see the tenant screening services comparison for what each one includes and who pays.
From the screening company
- Credit report, often with a score built for renting
- Eviction-related court records
- Criminal record searches
- Covered by the Fair Credit Reporting Act rules below
Your own checks
- Identity: compare the ID to the application
- Income: pay stubs, an offer letter or bank statements
- Rental history: call current and previous landlords
- Apply the same written criteria to everyone
Permissible purpose and the applicant's consent
"You can only get a consumer report if you have a permissible purpose," the FTC tells landlords. Its guidance says landlords "may get consumer reports on applicants and tenants who apply to rent housing or renew a lease," and that written permission from the applicant also shows a permissible purpose. The statute itself lists a "legitimate business need for the information ... in connection with a business transaction that is initiated by the consumer" (15 U.S.C. § 1681b(a)(3)(F)).
Two things to do before you order a report: get a signed authorization from every adult who will live in the unit (the rental application template includes one), and expect the screening company to ask you to certify "that you will use the report only for housing purposes" (FTC).
What counts as adverse action
"An adverse action is any action by a landlord that is unfavorable to the interests of a rental applicant or tenant" (FTC). The CFPB says it is not only a denial. It could also be:
- Requiring a co-signer on the rental agreement or lease
- Requiring a larger deposit or a higher rent payment than other applicants
The notice duty applies when the action "is based in whole or in part on any information contained in a consumer report" (15 U.S.C. § 1681m(a)). If a report was one reason among several, send the notice.
Adverse action notice checklist
These are the items 15 U.S.C. § 1681m(a) requires, with the statute's own words. The notice may be oral, written or electronic; a written notice gives you a record.
| Item | Statute text, 15 U.S.C. § 1681m(a) | How to do it |
|---|---|---|
| Notice that you took the adverse action | "(1) provide oral, written, or electronic notice of the adverse action to the consumer" | Say what you decided. Oral notice is allowed; a written notice is your proof. |
| Any credit score you used | "a numerical credit score as defined in section 1681g(f)(2)(A) of this title used by such person" | If a score played a part, give the score and the score information in 1681g(f)(1)(B)-(E). The screening company supplies it. |
| The screening company's contact details | "the name, address, and telephone number of the consumer reporting agency (including a toll-free telephone number established by the agency if the agency compiles and maintains files on consumers on a nationwide basis)" | Copy them from the report. Use the toll-free number for a nationwide agency. |
| The company did not decide | "a statement that the consumer reporting agency did not make the decision to take the adverse action and is unable to provide the consumer the specific reasons why the adverse action was taken" | One sentence, as in the notice below. |
| Right to a free report within 60 days | "a free copy of a consumer report on the consumer from the consumer reporting agency referred to in paragraph (3), which notice shall include an indication of the 60-day period" | Tell the applicant they can get a free copy if they ask within 60 days. |
| Right to dispute | "to dispute, under section 1681i of this title, with a consumer reporting agency the accuracy or completeness of any information" | Tell them they can dispute the report's accuracy or completeness with the company. |
Statute text from the U.S. Code on govinfo.gov (2023 edition), read October 29, 2026. The FTC's landlord guidance lists the agency contact details, the statement that the agency did not decide, and the rights to dispute and to a free report within 60 days; the statute adds the credit score disclosure when a score was used.
Write the adverse action notice
Fill in the screening company details to complete the notice.
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Notice of Adverse Action
Date:
To:
Rental applied for:
Thank you for applying. After reviewing your application, . This decision was based in whole or in part on information in a consumer report from the company below.
| Consumer reporting agency | |
| Address | |
| Phone (toll-free if it is a nationwide agency) |
The consumer reporting agency did not make this decision and is unable to tell you the specific reasons why it was made.
You have the right to get a free copy of your report from the consumer reporting agency named above if you ask for it within 60 days. You also have the right to dispute with the consumer reporting agency the accuracy or completeness of any information in the report it furnished.
Questions about this notice: .
Landlord
After the notice: disputes
If the applicant disputes the report, the CFPB says "the tenant screening or credit reporting company generally has 30 days to investigate your dispute, though in some cases they have 45 days. Some states impose shorter deadlines." The dispute goes to the screening company, not to you, which is why the notice must name it and give its address and phone number.
Keeping and destroying screening reports
What the FTC tells landlords
"When you're done using a consumer report, you must securely dispose of the report and any information you gathered from it." That "can include burning, pulverizing, or shredding paper documents and disposing of electronic information so that it can't be read or reconstructed" (FTC).
The Disposal Rule, 16 C.F.R. § 682.3
Anyone who keeps consumer information for a business purpose must take "reasonable measures to protect against unauthorized access" when disposing of it. Its examples: burning, pulverizing or shredding papers; destroying or erasing electronic media; or a contract with a record-destruction business, chosen after due diligence (16 C.F.R. § 682.3).
Until then, keep reports and applications in a locked cabinet or an encrypted folder, and limit who can open them.
Application and screening fees
Most screening services let the applicant pay, which is how "free" screening works for landlords; the screening services comparison shows each company's published price and who pays. Some states cap what you can charge. In New York, Real Property Law 238-a limits background and credit check fees to the actual cost or $20, whichever is less, and you must waive the fee if the applicant gives you a check done in the past 30 days. Check your state and city before you set a fee, and charge every applicant the same.
Records worth keeping
- Your written screening criteria, dated
- Each signed authorization
- A copy of every adverse action notice and how it was sent
- A note of the reason for each decision
Common mistakes
- Ordering a report before the applicant signs
- Skipping the notice because the report was only one factor
- Asking for a co-signer or bigger deposit without a notice
- Leaving old reports in a desk drawer or an open inbox
Criminal records and HUD guidance
HUD's fair housing office withdrew its June 10, 2022 memo "Implementation of OGC Guidance on Application of Fair Housing Act Standards to the Use of Criminal Records." The withdrawal took effect September 17, 2025, and was published in the Federal Register on April 6, 2026 (FR Doc. 2026-06624). The notice says withdrawn documents "should not be relied upon as authoritative," and also that "any actions that do not comply with the text of the Fair Housing Act continue to be subject to enforcement by the Department."
The safe practice does not depend on that guidance: write your screening criteria before you advertise, apply them to every applicant in the same order, and keep notes on why each decision was made. Check your state and city rules on criminal history and application fees too.
Tenant screening background check, step by step
- Publish your rental criteria: income, credit, rental history, occupancy and pets.
- Take a signed rental application and authorization from every adult.
- Order the report and certify your housing purpose to the screening company.
- Verify income and identity, and call previous landlords.
- Decide. If the report played any part in a denial, a co-signer, a larger deposit or higher rent, send the adverse action notice above.
- Approved? Sign the lease agreement, add a pet addendum if needed, and destroy screening copies you no longer need.
Charging the applicant for the report? Check the rental application fee limits by state first. Choosing a service: RentSpree review, RentPrep reviews.
Reviews of two common report sources: TransUnion SmartMove and Zillow tenant screening.
Frequently asked questions
What does a tenant background check show?
The FTC says tenant background checks can include rental and eviction history, credit history and criminal records. What you get depends on the screening package you order.
Do landlords need permission to run a background check?
A landlord needs a permissible purpose; the FTC says renting or renewing a lease qualifies, and written permission from the applicant also shows it. Get a signed authorization from every adult applicant and certify to the screening company that you will use the report only for housing.
What has to be in an adverse action notice?
Notice of the decision; any credit score you used with its score information; the screening company's name, address and phone number; a statement that the company did not make the decision and cannot give the reasons; and the applicant's rights to a free report within 60 days and to dispute it (15 U.S.C. § 1681m(a)).
Is requiring a co-signer an adverse action?
Yes. The CFPB says adverse action includes requiring a co-signer, or a larger deposit or higher rent than other applicants, not only a denial.
How should landlords dispose of screening reports?
Securely: the FTC lists burning, pulverizing or shredding paper and disposing of electronic files so they can't be read or reconstructed (16 C.F.R. § 682.3).