Rental Application Denied Due to Credit? Know Your Rights
Getting denied for an apartment is frustrating, especially when it’s because of your credit. But many renters don’t realize that landlords and tenant screening companies must follow specific laws when they pull your credit report. You have rights during the rental application process, and if those rights are violated, you may be entitled to monetary damages.
In this article, I’ll walk you through the legal protections that apply when credit is used in housing decisions, and what steps you can take if you believe your rights were ignored.
Did you Actually Authorize the Credit Check?
Before we even get into the denial, it’s important to understand the conditions in which your credit report can be pulled. Under the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681b(f), a landlord must have a permissible purpose to access your credit report.
In the context of a rental application, a permissible purpose usually means you submitted a formal application and understood that your credit would be reviewed. What matters under the FCRA is that you initiated the rental transaction. Your active participation is what gives the landlord legal authority to pull your report
But here’s where it gets murky: in today’s rental market, landlords and screening companies often collect your personal information (like your name, address, date of birth, and Social Security number) before you've technically applied. You might fill out a “prequalification” form, request a showing online, or even just email your info to speed things up and those actions can trigger a credit pull behind the scenes.
Here are some situations that may constitute an impermissible purpose under the FCRA:
Your credit report is automatically pulled after you create an account with a property’s online portal or screening service.
A leasing agent manually inputs your information into a screening system after an email or phone call, even if you never explicitly gave consent.
You apply with roommates or a partner, but the landlord uses one application to pull everyone’s credit, without direct approval from each person.
Just because a landlord has your personal information doesn’t mean they’re allowed to use it to access your credit. If you didn’t fill out a formal rental application or clearly authorize the credit check, the credit pull might’ve been a violation of your rights under the FCRA, and you might be entitled to statutory damages.
Was the Information in your Report Accurate?
Even if the credit pull was legitimate, the next question is whether the information in the report was accurate. Credit reports are notoriously prone to errors and when a landlord relies on those errors to deny your application, the consequences are immediate and frustrating.
Under the FCRA (15 U.S.C. § 1681e(b)), consumer reporting agencies and tenant screening companies must use “reasonable procedures to assure maximum possible accuracy.” But that doesn’t always happen. Reports may contain:
Accounts that don’t belong to you (known as a “mixed file”)
Debts that were paid but still show as unpaid
Duplicate or outdated derogatory marks
Eviction records that were sealed, dismissed, or simply incorrect
If you spot one of these issues, you have the right to dispute it under 15 U.S.C. § 1681i, which governs the dispute process. We break down exactly how to do this - and when to take legal action - in our article on how to fix credit report mistakes.
Did you Get a Proper Denial Notice?
If your application is denied based on certain information discovered on your credit report, you must receive an adverse action notice under the FCRA. This is required by 15 U.S.C. § 1681m(a).
That notice must include:
The name, address, and phone number of the credit bureau or screening company used
The credit score used in making the decision
A notice of your right to request a free copy of the report
A notice of your right to dispute the information
Unfortunately, this requirement is often ignored or handled poorly. Some landlords never send a notice at all. Others rely on automated platforms or vague rejection emails that leave you in the dark.
If you were denied an apartment and never received this type of notice, that’s a clear violation of your rights and one that could give rise to statutory damages.
Was the Denial Based on Credit or Something More?
Even if the landlord claims the denial was based on your credit, that’s not always the full story. Housing decisions are also governed by the Fair Housing Act (FHA), which prohibits discrimination based on race, national origin, religion, sex, disability, and familial status.
Some landlords use what seem like neutral credit policies (like requiring a minimum credit score of 700) but apply them inconsistently or in a way that disproportionately affects protected groups. That’s known as disparate impact, and it may be a violation of the FHA, even if there was no intent to discriminate.
The U.S. Department of Housing and Urban Development (HUD) has warned landlords that strict credit criteria can lead to discrimination claims, especially when they disproportionately exclude minority renters or applicants with disabilities.
In its May 2024 HUD/FHEO guidance, HUD explicitly warns that screening based on credit history can produce disparate impact on protected groups, particularly Black and Hispanic renters, individuals with disabilities, and families with children, even when such screening policies appear neutral on their face.
If you suspect you were treated differently than other applicants, or if the landlord couldn't explain a consistent credit policy, it’s worth exploring whether your denial raises concerns under fair housing law.
What to do Next
If your rental application was denied due to credit, take a moment to reflect on the process. Did you authorize the landlord or screening company to pull your credit report? Did you receive a proper adverse action notice explaining why you were denied?
Many tenants assume there’s nothing they can do after a rental denial. But in reality, both the FCRA and the Fair Housing Act give you clear, enforceable rights when housing decisions are based on credit. If something doesn’t feel right, speak with a consumer protection attorney to understand your legal options.