The terminology can be confusing for landlords trying to credit check tenants.
For instance, some websites offer free credit reports. Only consumer credit reports are free. The credit reporting agencies do not offer 
landlord credit reports for free. The only way for a landlord to use a free report is to have the tenant apply for the report, and show it to the landlord during the rental application process.
Free consumer reports are limited to one every 12 months. However, a consumer can also apply for a free report if they are unemployed, or have been subject to adverse action based on the current credit report.
In the U.S., only one website is authorized to fill orders for the free annual credit report consumers are entitled to under law. Yet dozens of websites claim to offer “free credit reports,” “free credit scores,” or “free credit monitoring”. These sites are not part of the legally mandated free annual credit report program. In some cases, the “free” product comes with strings attached. For example, some sites sign consumers up for a supposedly “free” service that converts to one they have to pay for after a trial period. If they don’t cancel during the trial period, they may find the company has started charging fees to their credit card. Some sites are scams, seeking to capture personal data.
Wisconsin landlords are required to accept these free consumer credit reports from applicants applying for rentals. The report can be up to one month old. Wisconsin landlords, and those who accept consumer reports from tenants, are at a serious disadvantage when it comes to tenant screening.
Credit scores, for instance a FICO or Beacon, and credit ratings are not a part of a credit report, but rather an add-on service available from the credit-reporting agencies for an additional fee. The free consumer credit report does not contain a credit score unless the consumer paid an extra fee for that service.
It is virtually impossible for the landlord receiving such a report directly from the applicant to verify that the information has not been doctored, some items were deleted, or that the credit report belongs to that particular individual. It is also difficult to know whether the date of the report has been altered. That can affect whether recent credit transgressions are on the report.
From the landlord’s perspective, all tenant credit reports and tenant background checks are “free”, because a landlord generally has the right to charge the tenant a fee to cover the costs associated with running the reports. There is no real incentive for a landlord to accept a consumer credit report directly from an applicant and run the risk of basing the rental decision on false or incomplete information.
Laws like the one is Wisconsin are passed to protect tenants from having to pay multiple application fees to various landlords while looking for a rental. In some circumstances, a landlord will pull a tenant credit report before they have made a qualified offer to the applicant, or before they have negotiated the terms for the rental agreement.
As a general practice, a landlord should not accept an application fee from someone who is not the front-runner for the rental. If that person declines to rent the property, then the landlord should approach any back-up prospects one at a time and run credit reports. A landlord should never accept a fee to run a credit report or tenant background check if they do not intend to run those tenant screening reports. In the event a landlord does not pull the reports, they should return that portion of the fee. In fact, it may be illegal for the landlord to retain those funds in that circumstance.
This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).
Click Here to Receive Landlord Credit Reports.
Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.
