Effective July, 1 2017 there are going to be changes regarding credit report criteria. They were announced by the National Consumer Assistance Plan last year.
The changes now take data accuracy and quality into consideration and specifically address-
- Medical debts won’t be reported until after a 180-day “waiting period” to allow insurance payments to be applied. The CRAs will also remove from credit reports previously reported medical collections that have been or are being paid by insurance.
- Consistent standards will be reinforced by the credit bureaus to lenders and others that submit data for inclusion in a credit report (data furnishers).
- Data furnishers will be prohibited from reporting authorized users without a date of birth and the CRAs will reject data that does not comply with this requirement.
- The CRAs will eliminate the reporting of debts that did not arise from a contract or agreement by the consumer to pay, such as traffic tickets or fines.
- A multi-company working group of the nationwide consumer credit reporting companies has been formed to regularly review and help ensure consistency and uniformity in the data submitted by data furnishers for inclusion in a consumer’s credit report.
Recently there have been a number of articles and announcements about these changes. What landlords and real estate agents using credit reports as part of their tenant screening need to know is that there should be only a minimal impact. And those changes should help clarify some information you are getting in your reports.
The new policy will require any record reported to a credit bureau to contain a name, social security number and/or birthdate, as well as an address. Tax liens and civil debt reports will likely be most impacted as SSNs are not included as a security precaution.
The accuracy of the reporting should be improved by matching records. As a result, reports with false positives should be reduced.
As I have mentioned in other postings, a credit report alone is not sufficient to adequately assess a rental applicant. Agents and landlords also need eviction and criminal reports. When you combine the three you get a much more robust view to make an informed decision.
TenantMagic provides comprehensive application and tenant screening at no cost to real estate agents, property managers and landlords. Applicants pay the fee.
Jay Apple is co-founder of TenantMagic, LLC www.tenantmagic.net