Beginning in 2025, Illinois landlords and property managers will have a new set of rules to follow when screening tenant applications. The 2025 state law makes landlords use credit reports from tenants instead of pulling credit reports through their usual processes. That means tenants can provide their own credit reports when the Tenant Credit Report Law goes into effect in January 2025. As part of this new law, landlords and property managers must accept tenant-supplied credit reports as part of their process for filling vacant rental properties.

In spirit, the Tenant Credit Report Law was created to make it easier for tenants to rent a property by removing the barrier of hidden application fees. In practice, anyone responsible for screening tenants for rental properties throughout the state of Illinois needs to be prepared to comply with this law. They’ll need to make extensive changes to their screening process, administrative costs management, and overall application process. The consequences for violating this law are no laughing matter. 

What's the Tenant Credit Report Law?

The Tenant Credit Report Law (HB 4926) goes into effect on January 1, 2025. It allows tenants to submit a reusable tenant screening report at their request and expense. The report must have been prepared within the last 30 days by a consumer credit reporting agency. It also must include the applicant’s name, contact information, last known address, verification of income, and results of an eviction history check. 

Chicago property managers and landlords have to accept credit reports from tenants as long as they meet these stipulations. They must also be directly available to the landlord for use in the rental application process or provided through an approved third-party website.

As we mentioned earlier, the new law is meant to make the process more transparent. It’s also supposed to make things easier for tenants, especially those who had trouble getting or paying for a credit report the regular way.

However, this new process also requires landlords to be even more fair and consistent when evaluating these reports.

How The Tenant Credit Report Law Impacts Your Screening Processes

When the new law goes into effect, it will change many of the ways Illinois landlords and property managers operate. Some changes have a positive impact⸺like no longer needing to order and pay for credit reports for every single application. However, it also means that landlords and property managers have to be extra careful to verify the accuracy of the reports potential tenants submit.

Here are some additional ways the new law impacts landlords and property managers. 

The Good News

1. Fewer Costs 

When tenants provide their own credit reports, landlords and property managers won't have to pay to order their own credit checks. Tenants will handle paying for and submitting their reports, which means lower costs for property managers. This can result in significantly lower placement costs when screening multiple applicants.

2. Access to More Tenants 

The new law helps applicants with less-than-perfect credit or who have struggled to pay multiple application fees at once. Tenants who may have stopped applying for rentals because it was cost-prohibitive can now do more extensive searches. This provides property owners with access to even more potential renters. 

3. Faster Screening 

Since tenants submit their own reports, the vetting process should proceed much faster. Applicants no longer have to wait for the screener to order credit reports and receive them. As a result, leasing decisions should go faster. Ultimately, this also helps property owners earn better returns on investments by shortening vacancy periods. 

Prepare for the Challenges Ahead

However, the Tenant Credit Report Law also provides some unique challenges for Illinois landlords and tenants. 

1. Legitimacy of Submitted Reports

We all know how easy it is to doctor photos, PDFs, and voiceovers with very little skill or cost. Prospective tenants with something to hide can go to extraordinary lengths. That puts the onus on the landlord or property manager to ensure tenant-provided credit reports are accurate and valid. 

2. New Processes for Credit Report Evaluations

Documenting and consistently screening criteria has always been important to demonstrate fair processes. That becomes even more important under the new law. Landlords and property managers now need to evaluate credit reports from a variety of sources as consistently and as fairly as possible to avoid potential discrimination claims.

Practical Tips for Screening Tenants

To follow the Tenant Credit Report Law and adapt to the new rules, landlords and property managers in Chicago and beyond need to update their tenant screening policies. Here are some practical steps to take:

1. Update Your Policies

Property managers need to revise their written tenant screening policies to reflect the new law. Anyone screening applicants must clearly state to applicants that they're responsible for providing an accurate credit report. This way, everyone knows what to expect.

2. Set Guidelines for Reports

To ensure tenant-provided reports meet proper standards, landlords and property managers should set clear guidelines for what's acceptable according to the new law. For example, application material should specify the approved reporting agencies (like Equifax, Experian, or TransUnion) and the timeframe within which a report is considered valid. Again, the law states these; the screener needs to reiterate this clearly in their application material.

3. Verify Report Accuracy

Even though tenants provide their own reports, landlords and property managers still need to verify the information provided is accurate. Consider using third-party verification services to crosscheck the details and confirm the applicant's identity. 

4. Train Your Team

Landlords who self-manage their rentals know they have to keep up with changing laws, including this one, all the time. Property managers need to make sure their staff completely understand the new law and how it affects the vetting process in their office. Once you’ve updated your processes, training staff on how to assess and process tenant-provided reports will help streamline the process and reduce errors.

5. Demonstrate Fairness and Consistency

We all know it's essential to base the evaluation of every applicant on the same criteria, regardless of their credit score. Be transparent in your applications about your criteria for approval, including things like income requirements, debt-to-income ratio, and credit score thresholds. Demonstrating your fair and consistent evaluations of every application reduces the risk of discrimination claims.

Get Help from GC Realty

At GC Realty & Development, we know Illinois property managers face steep learning curves and unique challenges as the Tenant Credit Report Law takes effect. Whether you self-manage as a landlord or operate a property management company, we're here to help you navigate these changes and keep your tenant screening practices efficient and compliant. From updating policies to verifying tenant-provided reports, our team is ready to guide you through this transition.

Need help adjusting your tenant screening process? Call GC Realty & Development today for expert advice on complying with Illinois credit law and enhancing your property management operations. We're committed to helping you stay ahead of industry changes and ensuring your practices are fair, efficient, and in accordance with the latest regulations.

Visit GC Realty & Development for more information or to schedule a consultation. We’ll help you confidently navigate tenant screening in light of the new Illinois credit law.

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