NLIHC, the National Housing Law Project, the National Consumer Law Center, and the Center for Survivor Agency and Justice on November 3 sent a letter to HUD Secretary Marcia Fudge requesting a meeting to discuss the use of credit reports and credit scores for tenants of HUD-assisted housing. The letter urges the secretary to prohibit public housing authorities (PHAs) and multifamily subsidized housing providers from considering tenants’ credit reports and credit scores in screenings and applications.
Renters who qualify for public or subsidized housing often struggle to find housing due to their credit reports and scores, even though credit reports and scores are a poor gauge of whether someone will be a good tenant. The letter argues that credit scores are designed to predict whether a borrower will become 90 days late on a credit obligation – not rent, which is not credit. Credit scores are also a reflection of an individual’s past ability to pay a credit obligation, not their current ability to pay rent.
The use of credit scores and reports in screenings of HUD-assisted tenants threatens to perpetuate inequitable and discriminatory outcomes in housing. Survivors of domestic violence, for example, often suffer financial abuse, which can include abusive partners fraudulently opening accounts in a survivor’s name or overcharging credit accounts, effectively ruining a survivor’s credit. Likewise, historical and ongoing discriminatory in housing and debt collection have led to significantly lower credit scores among Black households than among white households.
The letter urges Secretary Fudge to prohibit PHAs and multifamily subsidized housing providers from using credit reports and scores, or to, at minimum, prohibit PHAs and subsidized housing providers from denying an applicant based solely on poor credit history or low credit scores.
Read the letter at: tinyurl.com/huz78ysx