Using credit reports to screen tenants

Credit reports help you choose reliable tenants, but federal, state and city laws control how you get them, what you can charge and what you must tell applicants. Mena Realty follows these rules every time we screen applicants for an owner, and this checklist covers the main ones for New York City rentals.

General information, not legal advice. Laws change; check the official sources at the end of this page or ask your attorney.

Before you run a report

• Get the applicant’s written permission before you order a credit or tenant screening report. You may only use the report for the rental decision.
• Use the same written criteria for every applicant (for example, the income or payment history you require), and apply them the same way each time.
• On a written application, New York City requires a short disclosure about tenant screening reports in a box next to the request for personal information, in a contrasting color.

Screening fees: $20 maximum

Under New York Real Property Law § 238-a, you may charge an applicant no more than $20 or the actual cost, whichever is less, for background and credit checks. You may only collect the fee if you give the applicant a copy of the report and the receipt from the screening company. If the applicant gives you a background or credit check done in the past 30 days, you must waive the fee.

Post the tenant screening sign

If you take rental applications at an office or other place used for rental business, New York City requires a sign titled “Notice About Tenant Screening Reports.”

• It must say whether you use tenant screening reports and list the name and address of each screening company you use.
• The sign is 20 inches wide by 14 inches high, with a heading in 1½-inch capital letters and body text in 24-point type.
• Post it where an applicant sitting down to discuss the application can see it.
• Owners who live in a building with five or fewer units are exempt in that building.
• Fines start at $250–$500 for a first violation.

The City provides a fill-in sign template.

Applicants who use rental assistance

Source of income, including rental assistance vouchers, is protected under the New York City Human Rights Law. Per the NYC Commission on Human Rights:

• If the voucher pays 100% of the rent, you may not reject the applicant based on credit history or score.
• If the tenant pays part of the rent, you may check credit, but requiring a specific credit score is evidence of discrimination.
• When rent is based on the tenant’s income, you may not add extra income requirements, and you may not require a guarantor or co-signer.

For HPD- and HDC-financed apartments rented through NYC Housing Connect, marketing agents may not run credit checks on applicants who have a housing voucher.

A March 2026 state appeals court decision about Section 8 under state law has been appealed and is on hold. New York City’s own source-of-income protections remain in effect.

Criminal history and housing court records

• Criminal history: under NYC’s Fair Chance for Housing Law (in effect since January 1, 2025), you may not ask about or check criminal history until after you have reviewed income and credit and made a written conditional offer. Strict limits apply to what can be considered after that.
• Housing court: New York law (Real Property Law § 227-f) prohibits refusing to rent to someone because they were involved in a past or pending housing court case.

If you deny an application or change the terms

If information in a report leads you to deny an application, require a co-signer, ask for a larger deposit or charge higher rent, the federal Fair Credit Reporting Act requires an adverse action notice, even if the report played only a small part. Put it in writing. It must include:

1. The name, address and phone number of the screening company that supplied the report.
2. A statement that the screening company did not make the decision and cannot explain why it was made.
3. The applicant’s right to dispute inaccurate information and to get a free copy of the report from that company within 60 days.
4. If you used a credit score: the score, its range, the date and source, and the main factors that hurt it.

New York City law also requires you to tell the applicant that the decision was based on a screening report and give them the screening company’s name and address.

Protect and dispose of reports

Keep reports where only people who need them can see them. When you no longer need a report, shred paper copies and permanently delete electronic copies.

Questions about screening?

Our Management team can answer questions about screening applicants for your building. Call (917) 589-3769, Monday to Friday, 10 to 5.

Official sources

• FTC — Using consumer reports: what landlords need to know
• NY Real Property Law § 238-A — limits on screening fees
• NYC Rules § 5-265 — tenant screening sign requirements
• NYC — tenant screening sign template
• NYC Commission on Human Rights — source of income FAQ for landlords
• NYC — Housing Connect credit check change for voucher holders (Oct 2023)