New bill introduced in New York re FICO scores...thoughts

[Michael J.]

I'm not sure if fellow investors based in NY are aware but; there was a new bill introduced that may dramatically hinder how potential tenants are screened. 

I cant see how this is beneficial to an investor considering this is a major indicator of not only tenants being responsible by paying their bills, but also paying on time (Dave Ramsey's opinion would differ).

 Read below

“Ludicrous” new bill would prevent landlords from checking tenant credit scores

The city government may soon make it harder for landlords to screen potential tenants.

Council member Mark Levine introduced a bill that would prevent building owners from using FICO credit scores – as well as information about medical debt, consumer debt judgements and debts sent to collections – in selecting tenants to rent to.

“We don’t want people who have had tough times financially to be blocked out of the housing market. If that happens they’re going to end up in homeless shelters” Levine told the New York Daily News. 

He also cited difficulties faced by affordable housing developments in finding qualifying tenants. 

The bill would still allow landlords to obtain proof of income, as well as detailed credit reports that include information on total debt owned, bankruptcy and foreclosure history and delinquencies on current debt, the Daily News reported. 

Those caveats weren’t enough for the Rent Stabilization Association’s Frank Ricci. 

“It’s a ludicrous idea,” he told the Daily News. “An owner has to have some ability to screen a tenant’s ability to pay the rent.” 

The bill doesn’t specify a fine for landlords who fail to abide by the proposed rules, but tenants would be able to bring complaints under the city’s human rights law. [NYDN] – Ariel Stulberg - See more at: http://therealdeal.com/blog/2015/11/11/new-bill-wo...

[Jerry Bruckenheimer]

It's the same premise as Fico 09 which will give less weight to certain derogatories i.e. Lowering the bar to accommodate the new economy. The key point in the article (if accurate) 'The bill would still allow landlords to obtain proof of income, as well as detailed credit reports that include information on total debt owned, bankruptcy and foreclosure history and delinquencies on current debt, the Daily News reported'

What's in the potential tenants credit file is vastly more important than any score. Looking at the full credit file tells you everything you need to know.