How to Handle a Tenant Who Fails Screening (and Stay Compliant)

1) Confirm the Reason for the Rejection

Before acting, compare your decision to your written rental criteria and ensure the outcome is consistent.

• Credit score below your minimum
• Income below your income‑to‑rent ratio
• Eviction history or serious delinquencies
• Relevant criminal convictions (evaluate case‑by‑case)
• Incomplete, inconsistent, or falsified application

Apply the same criteria to every applicant to avoid discrimination claims.

2) Follow Fair Housing Rules

The Fair Housing Act prohibits discrimination based on race, color, national origin, religion, sex, familial status, or disability. Use objective standards and apply them uniformly.

3) Send an Adverse Action Notice (FCRA)

If your decision relied on a consumer report (credit, criminal, eviction), the FCRA requires an Adverse Action Notice including:

1. CRA name, address, and phone
2. Statement that the CRA didn’t make the decision
3. Right to a free copy of the report within 60 days
4. Right to dispute inaccurate or incomplete info

Most screening platforms provide templates. Keep a copy for your records.

4) Notify Promptly and Professionally

Communicate quickly and clearly. Be courteous, avoid arguments, and don’t provide unnecessary detail.

Email Script

Hello [Applicant Name],

Thank you for your interest in renting [Property Address]. After reviewing your application and screening report, we will not be moving forward.

This decision was based on information from a consumer reporting agency. Please see the attached Adverse Action Notice for details about your rights and how to obtain a copy of your report.

Sincerely,
[Your Name / Company]

5) Keep Records

Store the application, screening reports, correspondence, and a copy of the notice. This demonstrates compliance if your decision is challenged.

6) Handle Application Fees Appropriately

If a report wasn’t run, refund promptly. If the fee paid for screening, you may retain it; clarify what the fee covered.

7) Periodically Review Your Criteria

If many applicants fail for the same reason, reassess whether your standards are reasonable for your market while maintaining fairness and risk controls.

FAQs