There isn’t much about our daily lives the pandemic hasn’t impacted. And the housing industry is no exception. Property managers face potential for delinquent payments and apartment turnover as their tenants manage their own difficulties. The challenges become an endless cycle of waiting for the financial crisis to evolve to a more stable environment. What can potentially be lost in the shuffle is processes, or changes to them, for prospective tenants. Tenant screenings should certainly still remain a priority for property managers and owners.
Amending the FCRA During the Pandemic
As property managers screen potential tenants, it’s necessary to stay informed of changes impacting credit reports. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) in particular brings change to tenant screenings. When the CARES Act became law, federal and state government encouraged financial services companies to offer payment relief to consumers impacted by COVID-19.
However, the CARES act also triggered an amendment to the Fair Credit Reporting Act (FCRA). If a consumer accepted assistance from their financial services companies, their account status is required to adjust accordingly. The assistance could range from deferring payments, making partial payments, modifying a loan or others. If a consumer participated, regardless of the aid, their account would be required to be adjusted from “delinquent” to “current” status. For consumers with delinquent accounts who elect not to accept the assistance, their status would remain.
How Does the Amended FCRA Impact Tenant Screenings?
Property managers have the opportunity to adjust how they screen a potential tenant. However, credit reports are imperative to gaining a better understanding about whether or not the tenant will consistently afford rent. Having a clear understanding of what information is provided can help property managers fill vacancies with greater confidence.
Consider the amended FCRA and how it could impact how you approve or disapprove tenant applicants. If an applicant accepted CARES assistance, consider their financial stability prior to the pandemic and now. While the current status is important, thinking long-term could paint a clearer picture of whether or not the tenant is a right fit. We can help identify the information needed to fully understand the financial information provided and its potential impact on your decisions.
One Source provides customizable tenant screening packages that, regardless of the depth of information gathered, can be turned around in 48 hours. As a leading background check solutions provider, we believe it’s our responsibility to know and understand current state and federal regulations, and help businesses determine what information is most valuable to their decision making.