Inaccurate Credit Reports and the Impact on Housing Applications

Introduction: Understanding the Impact of Credit Reports on Housing

Your credit report plays a significant role in many aspects of your life, including renting an apartment or securing housing. Landlords and property management companies often rely on credit reports to determine if an applicant is financially responsible and capable of paying rent on time. However, errors on your credit report—whether they be from mistaken identity or clerical errors—can have a devastating effect on your ability to secure housing.

This page explains how inaccurate credit reports can result in housing denials, what you can do if you encounter such issues, and your rights as a tenant under the law.

How Inaccurate Credit Reports Can Lead to Housing Denial

When you apply for an apartment or rental property, landlords typically run a background check that includes a credit report. They use this information to gauge your financial reliability. If the report contains inaccuracies—it can negatively affect your credit score and result in an outright denial of your rental application.

Common Credit Report Errors That Can Impact Housing

Inaccuracies in credit reports can come from various sources, including:

1. Duplicate or Old Accounts: Sometimes, an old account that’s already paid off or closed may appear as an open balance on your report. Duplicate entries of the same debt can also artificially inflate your debt load.
2. Mistaken Identity: If you share a name with someone who has poor credit, their negative history might end up on your report by mistake.
3. Late Payments Not Accounted For: Payment records may not reflect accurate dates, causing reported late payments that were actually paid on time.

What to Do If You Are Denied Housing Due to an Inaccurate Credit Report

If you find that your rental application has been denied due to a credit report error, there are steps you can take to resolve the issue:

1. Request a Copy of Your Credit Report: Under the Fair Credit Reporting Act (FCRA), you are entitled to a free copy of your credit report from each of the three major credit reporting agencies—Experian, Equifax, and TransUnion—once a year. Review your report carefully to identify any inaccuracies.
2. Dispute the Error: If you notice incorrect information, contact the credit reporting agency to dispute it. They are required to investigate and correct errors within a reasonable time frame (usually 30 days).
3. Contact the Creditor: Sometimes errors come from the creditor itself. Reach out directly to the company that reported the inaccurate information and ask them to correct it.
4. Follow Up in Writing: Always keep a record of your correspondence. If you dispute an error, follow up in writing and keep a paper trail of all communications.
5. Provide Additional Documentation: If a landlord or property manager denies you based on your credit report, ask them for a copy of the credit report used. You can provide documentation that corrects the error and may be able to have the decision overturned.

Know Your Rights: Fair Housing Laws and Credit Reporting

Under federal laws such as the Fair Credit Reporting Act (FCRA) and Fair Housing Act, you have rights to protect you against discrimination based on inaccurate information or erroneous credit reports:

• The FCRA requires that credit reporting agencies maintain accurate and complete information. If an error is found, it must be corrected within a set time frame.
• The Fair Housing Act protects against discrimination in housing. This includes being denied housing due to errors in your credit report, especially if those errors are not your fault.

If you believe a landlord is unfairly denying you housing because of inaccurate information, you have the right to file a complaint with the Consumer Financial Protection Bureau (CFPB) or Equal Employment Opportunity Commission (EEOC).

How to Prevent Credit Report Issues in the Future

To avoid these challenges in the future, consider the following steps:

1. Regularly Monitor Your Credit: Stay on top of your credit report by checking it regularly for errors or unusual activity.
2. Set Up Fraud Alerts: Consider placing a fraud alert or credit freeze on your report if you believe your information may be at risk.
3. Ensure Payments Are Reported Correctly: Always check that your payments are being correctly reported by your creditors.
4. Know Your Rights: Be familiar with your rights under both the FCRA and the Fair Housing Act. This will help you navigate any issues that arise during the housing application process.

Conclusion

An inaccurate credit report can be a major roadblock when seeking housing or an apartment. Understanding the potential errors and knowing how to address them can help you avoid denials and secure the home you deserve. If you face an issue with your credit report, take immediate action to dispute the inaccuracies and protect your rights as a tenant. Always remember, your credit history doesn’t have to define your future—accurate information is the key to getting the housing you need.

For Assistance

Don’t let an inaccurate report hold you back from finding the perfect home. If you need help resolving a credit report dispute feel free to reach out to us through our contact page or call us at 844-855-0500.