Bill would mandate landlords or leasing agents requesting an application fee for a credit check to share the report with the applicant
Bill would also mandate that prospective tenants not be charged a fee for a credit report unless the rental unit is available at the time of screening
Legislation would help New Yorkers learn more about their credit history at the moment when it most matters
New York City Comptroller Scott M. Stringer joined Council Members Andrew Cohen and Carlina Rivera in proposing legislation (Int 1499-2019) at the New York City Council that would require any landlord or leasing agent that charges a prospective tenant a credit check fee to share that credit report with the applicant, regardless of whether a lease is signed. The proposed legislation would grant prospective tenants unprecedented access to their credit history at the moment they need that information the most. The bill would also mandate that prospective tenants not be charged a fee for a tenant screening report unless the rental unit is available during the time period that a renter is looking to occupy the dwelling, helping protect tenants from unfair fees that are charged by leasing and acting agents.
Int 1499-2019 stems from a 2017 report by Comptroller Stringer, entitled “Making Rent Count,” which aimed to help New Yorkers lift their credit scores, save money, and alleviate deep disparities in credit histories across the city. The report showed how adding rental information to credit files can help boost credit scores for New Yorkers and reduce credit disparities. While consumers can generally request a limited number of free credit reports from credit bureaus, it is common practice that landlords and leasing agents charge housing applicants a fee to perform a more comprehensive check, passing on the cost to the applicant without disclosing the results of the report.
“When a tenant hands over an apartment application fee to have their credit history reviewed by a landlord or leasing agent, they deserve to have access to that credit report. The process of finding and qualifying for an apartment is exactly when a tenant needs their credit information the most and this bill would provide crucial insight into the health and accuracy of tenants’ credit and financial histories,” said Comptroller Stringer. “Helping New Yorkers take control of their credit is critical to solving the affordability crisis by helping consumers gain new financial opportunities, reduce costs of borrowing, and save money. I want to thank Council Members Andrew Cohen and Carlina Rivera for sponsoring this important legislation to ensure that all tenants have access to their credit information. Credit is at the core of upward mobility and financial empowerment, and it should not be taken for granted.”
This legislation, which will financially empower New Yorkers by granting them with more holistic credit information, is part of the Comptroller’s “Making Rent Count” initiative. To date, the Comptroller has launched a series of pilot projects that enable participating residents to opt-in to have their monthly rent payments count toward their credit scores, just as mortgage payments do for homeowners – helping tenants take control of their credit and secure better rates for loans, insurance, cell phone bills and more. The initiative has expanded to 2,600 apartment units, split between the Banana Kelly Community Improvement Association in the Bronx, Ocean Bay Apartments in Queens, and the Grand Street Guild Apartments in Manhattan.
“This piece of legislation aims to protect New Yorkers from the unscrupulous practices used by some real estate agents that try to make extra money off the backs of people seeking apartments,” said Council Member Andrew Cohen. “There are too many barriers and fees involved in the process of finding an apartment in New York City, and these confusing practices disproportionately affect low-income residents. We must continue to find ways to protect our most vulnerable New Yorkers from these abusive practices. I am proud to partner with Comptroller Scott Stringer and Council Member Carlina Rivera on this important piece of legislation.”
“We need to demystify the apartment-hunting process in New York, and part of that is giving New Yorkers the chance to know what the credit scores used in their rental application actually are,” said Council Member Carlina Rivera. “I want to thank Comptroller Stringer and Council Member Cohen for being partners in the fight to bring real accountability and access to the rental industry.”
“Making Rent Count” Report
The benefits of incorporating rent payment information into credit files are detailed in the Comptroller’s October 2017, “Making Rent Count” report, in which the Comptroller’s Office studied a representative sample of city tenants paying rents under $2,000 and found that reporting rent history would:
- Raise credit scores for 76 percent of New York City renters who currently hold a credit score. Specifically:
- More than half (57 percent) would see their score rise between 1 and 10 points
- Nearly one in five (19 percent) would have their score boosted by 11 points or more
- 18 percent would see no change at all
- 6 percent would see a possible decline in their scores
- Provide nearly 30 percent of renters with a credit score for the first time. The average new score for these mostly low-income renters — now categorized as “invisible” or “unscorable” because of the relative dearth of financial information in their credit files — would be a prime score of 700.
