Denying a rental application is a regulated act. When a credit report, eviction history, or criminal background report influenced the decision in any way, the federal Fair Credit Reporting Act requires the landlord to send an adverse action notice, and getting it wrong exposes even small landlords to statutory damages.
This letter handles both cases: a plain professional denial when no consumer report was involved, and the full FCRA adverse action notice naming the reporting agency and the applicant's rights when one was.
What the FCRA adverse action notice must contain
If a consumer report contributed to the denial, even partially, and even if other factors also mattered, the notice must include: the name, address, and toll-free phone number of the consumer reporting agency that supplied the report; a statement that the agency did not make the decision and cannot explain it; the applicant's right to a free copy of the report from the agency within 60 days; and the applicant's right to dispute the accuracy or completeness of the report with the agency. The same rules apply when you take adverse action other than outright denial, such as requiring a co-signer or a higher deposit because of the report.
Adverse action includes more than denials
Approving with tougher terms because of a consumer report, such as demanding a larger deposit or a co-signer, is also adverse action under the FCRA and triggers the same notice requirement.
Stating the reason safely
The FCRA does not require you to state a reason, but honest, objective reasons protect you under fair housing law: an income threshold applied to every applicant, verifiable negative landlord references, or incomplete application materials. Avoid subjective phrasing and never reference protected characteristics: race, color, religion, national origin, sex, familial status, or disability under the federal Fair Housing Act, plus additional categories in many states and cities, such as source of income. The safest denial letter cites a uniform criterion and shows it was applied uniformly.
- Good: "Income did not meet our 3x rent requirement applied to all applicants."
- Good: "Another applicant with an earlier complete application was selected."
- Risky: "We felt the unit was not a good fit for your household."
Keep the paper trail
Keep the application, the screening criteria in force at the time, the report (subject to its terms), your notes, and a copy of this letter. If a rejected applicant files a fair housing complaint or an FCRA claim, the documented, consistent process is the defense. Send the denial promptly once the decision is made, and use the same letter format for every denial.
Frequently asked questions
Do I have to tell a rental applicant why they were denied?
Federal law does not require a reason unless a consumer report was involved, in which case the FCRA notice elements are mandatory. Some state and local laws do require reasons. Practically, stating an objective, uniformly applied reason is safer than silence.
What triggers the FCRA adverse action requirements?
Any denial or less favorable term based in whole or in part on a consumer report: credit reports, tenant screening reports, eviction history, and criminal background checks obtained from a reporting agency all count. If the report played any role at all, send the notice.
Does the FCRA apply to small landlords with one unit?
Yes. Any landlord who uses consumer reports in tenant screening must comply with the adverse action requirements, regardless of portfolio size.
Can I deny an applicant based on criminal history?
Blanket criminal history bans carry fair housing risk under federal guidance, and several states and cities restrict the use of criminal records in screening. If you consider criminal history, use an individualized assessment of the nature, recency, and relevance of the record, and apply it consistently.
Should the denial letter be mailed or emailed?
Either can satisfy the FCRA, but keep proof of sending. Mail with a record, or email with a retained copy and delivery confirmation, dates the notice and closes the file cleanly.