As I wrote last month, big changes are coming to credit reports as of July 1st. For the multi-family and property management industry, the most significant impact is on resident screening and tenant screening. Why? Because eviction judgments will disappear from all credit reports as of July 1, 2017.
The three credit bureaus, Equifax, Experian and TransUnion, as part of a lawsuit settlement with various state Attorney Generals, agreed to the creation of the National Consumer Assistance Plan (NCAP). For companies that use credit reports, the biggest change will be in the decreased reporting of public records, specifically tax liens and civil judgements. Eviction judgments, such as forcible detainer and unlawful detainer judgments, are civil judgments, and thus they will disappear from credit bureau reports on July 1st.
The reason virtually all civil judgments (and about half of tax liens) will vanish from credit reports is the NCAP requirements that (1) sufficient PII (personally identifiable information) exist on the record, and (2) that public records be collected and updated at least every 90 days. PII includes name, address, date of birth, and social security number. To be reported by any of the three credit bureaus, at least three of the four PII must be present on the public record. Since effectively all civil judgments do not have social security numbers and dates of birth, they will be removed from credit reports starting July 1st (because only two of the four PII does not qualify for reporting by the three credit bureaus).
For resident screening and tenant screening users, this means that eviction judgments will cease to be reported on credit reports in less than a week. Fortunately, there is an alternative. Reliable Background Screening provides a National Instant Eviction Search as a separate product. This product collects forcible detainer and unlawful detainer (eviction) judgments, and since this product does not come from the credit bureaus, it is not impacted by this NCAP settlement. Thus, Reliable Background Screening will be able to continue to report eviction judgments included in its National Instant Eviction Search product.
Resident screening and tenant screening users who are not currently obtaining this separate Eviction Search product must now purchase it by requesting to have the Eviction Search product added to their resident or tenant background screening package, if they want to continue finding eviction judgments. Property managers should consider raising their application fee to pass through the additional expense of purchasing the Eviction Search product.
Credit reports will still be needed, since collection accounts for landlord and apartment debts will continue to be displayed on credit reports. However, adding the separate Eviction Search product will be essential, since uncovering eviction judgments is important to most property managers. Other businesses that use credit reports may also find the National Instant Eviction Search product helpful, as it is a way to reveal at least some civil judgments.
Posted by: Rudy Troisi. President, Reliable Background Screening.
