Does California law limit how landlords can use a rental applicant’s credit score?
Yes, but only for applicants receiving government rent subsidies like Section 8. Starting January 1, 2024, California’s Fair Employment and Housing Act (“FEHA”) requires landlords to give applicants the option to provide “lawful, verifiable alternative evidence” of their ability to pay rent, instead of relying on their credit history. The landlord must give the applicant time to submit this proof, and then consider it instead of the credit score.
What counts as “lawful, verifiable alternative evidence”
It includes things like government benefit payments such as Supplemental Security Income (“SSI”) or veterans benefits, pay stubs, and bank statements.
Example: Paola is applying to rent an apartment. She has a Section 8 voucher, and her share of the rent would be $250 a month. Though she has a low credit score of 520, she can easily pay her share with her monthly SSI income of $1,182.94. Under the new law, the landlord must give Paola the chance to provide proof (“lawful, verifiable alternative evidence”) of her SSI income to show she can pay, instead of using her credit score to make the decision.
Can a landlord still check employment and references?
Yes, landlords can still verify a tenant’s employment, ask for landlord references, and confirm their identity. The new rules only affect the use of credit scores.
What if a landlord doesn’t give the option to provide alternative evidence?
If a landlord doesn’t follow the law, the applicant can file an administrative complaint with the California Civil Rights Department (CRD) or take legal action. Generally, complaints must be filed within 1 year, and lawsuits within 2 years of the discrimination.
Can DREDF help if a landlord doesn’t follow the law?
Yes, DREDF is interested in hearing from tenants who weren’t given the option to provide alternative proof of their ability to pay rent. We are also looking into cases where landlords require applicants to buy rent insurance. If you’ve experienced this, you can email DREDF at info@dredf.org with “CREDIT INTAKE” in the subject line or call (510) 644-2555.
