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Are credit reports reliable when applying for a Boston apartment?

They have Fast results, but unreliable. The national credit bureaus Equifax, Experian and TransUnion — the Big Three — provide credit reports for Boston apartment applicants. But there are thousands of smaller consumer reporting agencies, the most lucrative being the approximately 2,000 screening companies, which have become a $3 billion industry. These smaller companies also provide credit reports for numerous Boston apartment applicants.

The data in those reports, as in credit reports, are often incorrect. Federal Trade Commission and the Consumer Financial Protection Bureau suggest that the issue is widespread.

What type or errors are on Boston apartment credit reports?

A report on one person might include information from someone else with a similar name, date of birth or Social Security number. It can also be marred by credit lines and missed payments resulting from identity theft and can list dismissed cases and debt older than seven years, which is supposed to be excluded. Reports have even been known to list rental applicants as dead.

What can a Boston apartment applicant do to correct errors on a credit report?

Under the Fair Credit Reporting Act, people can dispute their file and the reporting agency must correct errors within 30 days. Yet in areas like downtown Boston particularly in Back Bay, Beacon Hill and the Seaport District you could lose an apartment within that 30-day period. If anything, negative shows on the report, landlords just say, next applicant.

How common are error on a credit report?

About one in five Americans has at least one error on a Big Three credit report, according to a study by the FTC. To minimize the effect of mistakes, mortgage lenders and others, usually request a credit report from each of the Big Three and use the middle score. However, when errors do occur, they are often present in more than one report, advocates say.

How affective are credit agencies in corrected errors for Boston apartment applicants?

The dispute process doesn’t work for most people, according to the Consumer Financial Protection Bureau, which analyzed complaints it received against the Big Three. Complaints are forwarded to a support service, such as Intelenet in India, used by Equifax and TransUnion, and Experian Services Chile in Chile. Employees each process around 90 disputes per day and have little time to review them properly.

Complaints about the Big Three to the CFPB have accelerated in recent years and totaled more than 700,000 from January 2020 to September 2021.

Tenant screening companies are less studied, and disputing their errors is even more convoluted. Landlords are required to tell tenants if their screening report is declined (or if their rent or security deposit is increased because of something in the report) and which company compiled the report. However, the law is difficult to enforce and landlords don’t always follow through.

More bad news for apartment applicants

Unlike with employee background checks, landlords are not obligated to show tenants their screening report. And it’s tricky for apartment hunters to find out in advance what a landlord will see on their report.


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