Denying a rental applicant on DIY landlord software: FCRA adverse-action notices, Colorado’s 20-day written denial, and what RentRedi, TurboTenant, and Avail actually send

• Is: the step after our tenant screening costs and applications & lead pipeline pages. It covers what federal law requires when a screening report affects your decision, what Colorado adds (reasons, report copy, 20 days, income and look-back limits, portable reports, the new application disclosure), what each app’s deny or reject button actually does, and how to keep a decision file that will hold up. Colorado is the worked state, with a decision table, a $1,850 worked example, a checklist, and an FAQ.
• Is not: a guide to choosing screening criteria from scratch, a fair-housing training, or a review of tenant-screening companies. Criminal-history policy gets one section, because Colorado sets hard look-back limits. Federal disparate-impact analysis for criminal records is out of scope.
• Not the same as: refusing to renew a current tenant (see renewals), or turning down a replacement roommate or a sublease (see roommate changes and subleases). Those may still involve a consumer report and an adverse-action notice, but the Colorado application rules are written for a “prospective tenant.”
• Uncertainty rule: we didn’t deny anyone through a live account. Statute text is the 2025 C.R.S. on Justia, plus 2026 session-law text read directly on leg.colorado.gov for HB 26-1196. Vendor behavior comes from help pages and screenshots read tonight. Where a vendor page and the statute disagree, we follow the statute and say so.

• The trigger is broad. If you take “any adverse action with respect to any consumer that is based in whole or in part on any information contained in a consumer report,” you owe the notice (15 U.S.C. 1681m(a)). For housing, “adverse action” includes any determination “made in connection with an application … and adverse to the interests of the consumer” (1681a(k)(1)(B)(iv)). The FTC’s landlord guidance says the notice is required “even if information in the consumer report wasn’t the primary reason for the decision.”
• Conditional approval counts. The FTC lists these as common landlord adverse actions: “Requiring a co-signer on the lease,” “Requiring a deposit that would not be required for another applicant,” “Requiring a larger deposit than might be required for another applicant,” and “Charging a higher amount for rent than for another applicant.” If the TransUnion report contributed to “approved with a guarantor,” you owe the notice even though you said yes. See co-signers & guarantors.
• What it must contain (1681m(a)(1)–(4)): (1) notice of the adverse action, which may be oral, written, or electronic; (2) the numerical credit score you used, if you used one, with the information in 1681g(f)(1)(B)–(E): the score range, up to four key factors that hurt the score, the date the score was created, and who provided it; (3) the name, address, and phone number of the consumer reporting agency (toll-free if it’s nationwide), plus a statement that the agency “did not make the decision” and “is unable to provide the consumer the specific reasons”; and (4) notice of the right to a free copy of the report from that agency, “which notice shall include an indication of the 60-day period,” and the right to dispute accuracy or completeness with the agency.
• The 60-day free report. The agency must give the applicant their file for free if they ask within 60 days after receiving your notice (1681j(b)). The FCRA doesn’t require that request to be in writing. TurboTenant’s email tells applicants they “must request a copy … in writing,” which is stricter than the statute. The applicant can ask however TransUnion accepts requests.
• Credit scores. TransUnion’s rental reports (ResidentScore on RentRedi and Avail; TurboTenant’s report includes a “credit score”) put a score in front of you. The FTC landlord guidance says that if you “use a credit score in deciding to take an adverse action,” you must disclose the score, its source, its date, the range, and the key factors. None of the three apps’ denial flows we read fills those in. If the score mattered, copy those fields from the report into your letter. The SmartMove template has a section for them.
• Information from people other than the bureau. If the decision rested on something a prior landlord or employer told you directly, 1681m(b)(1) gives the applicant the right to ask within 60 days for “the nature of the information,” and requires you to “clearly and accurately disclose” that right when you announce the decision. That subsection is written for “credit … denied,” and whether it reaches a lease isn’t settled in anything we read. TransUnion’s SmartMove template includes it as a checkbox anyway, and including it costs nothing.
• Liability. Willful violations: actual damages or statutory damages of $100–$1,000, punitive damages, and attorney fees (1681n). Negligent violations: actual damages and fees (1681o). There’s a defense if you “maintained reasonable procedures to assure compliance” (1681m(c)), which is a good reason to have a written denial checklist. Suits must be filed within two years of discovery and no more than five years after the violation (1681p).
• Getting the report in the first place. A landlord’s permissible purpose is “a legitimate business need … in connection with a business transaction that is initiated by the consumer” (1681b(a)(3)(F)(i)). All three apps have the applicant authorize and pay for, or accept, the TransUnion request themselves, which handles this. Don’t pull a report on someone who hasn’t applied.

• Every denial needs written reasons. “If a landlord denies a rental application, the landlord shall provide to the prospective tenant a written notice of the denial that states the reasons for the denial” (38-12-904(2)(a)(I)(A)). This isn’t limited to report-based denials. A denial for low income shown on pay stubs, or because you rented to someone else, is still a denial. Our reading: send the notice to everyone you turn down, with a truthful reason such as “another applicant who met the criteria was approved first.”
• If you got a consumer report, add the report and a dispute advisement. If the application “results in a landlord obtaining a consumer report,” the landlord “shall also provide a copy of the consumer report … and an advisement of the prospective tenant’s right to dispute the accuracy of the consumer report with the consumer reporting agency pursuant to section 5-18-106” ((2)(a)(I)(B)). This is triggered by obtaining the report, not by relying on it. It’s also stricter than the FCRA, which only requires telling the applicant how to get a free copy from the agency.
• Proprietary scores. If you “cannot directly cite” your criteria because a proprietary screening system was used (such as a recommendation or a ResidentScore cutoff), you must give “a copy of the report from the screening company … with only the proprietary information redacted” ((2)(a)(II)).
• Electronic is fine unless they ask for paper ((2)(a)(III)).
• The 20-day clock. The landlord “shall make a good-faith effort to do so not more than twenty calendar days after making the decision to deny” ((2)(b)). The clock starts at your decision, not at the application or at the end of the listing. Calendar days, weekends included.
• Penalties. A landlord who violates any part of 38-12-902 to -905 is liable for $2,500 plus court costs and reasonable attorney fees (38-12-905(1)). The applicant must give you notice at least seven calendar days before suing ((2)). If you “correct or cure” within seven calendar days of that notice, you owe a $50 penalty and nothing more ((3)). A bad-faith meritless claim shifts your costs and fees to the applicant ((4)).

• Income: you can’t require more than 2× rent. If you use financial information, you may ask about income only to check that annual income “equals or exceeds two hundred percent of the annual cost of rent,” and you “shall not require a prospective tenant to have an annual amount of income that exceeds two hundred percent of the annual cost of rent” (38-12-904(1)(d)). That is 2× rent, not the 2.5×–3× in many national guides. RentRedi’s compliance blog (updated Jan. 2026) says “most landlords require tenants to earn between 2.5 to 3 times the monthly rent,” and Avail’s accept/deny guide uses “at least three times the monthly rent.” Both are illegal in Colorado. “Amount of income” includes wages, contractor payments, subsidies, “any other public or private source,” and “all of a tenant’s or prospective tenant’s cash assets” (38-12-902(1)), so savings count toward the 2×.
• Voucher and subsidy applicants. For someone renting with a housing subsidy, the 200% test applies only to “the portion of the annual cost of rent that is to be paid by the prospective tenant,” and you may not consider or ask about their “credit score, adverse credit event, or lack of credit score” unless federal law requires it ((1)(c)). Violating (1)(c) or (1)(d) is also income discrimination under 24-34-502(1)(q), enforceable through the Colorado Civil Rights Division ((1.8)). It carries a $50 initial penalty, then $2,500 if not cured within seven days, plus economic damages, costs, and fees (38-12-905(5)).
• Source of income and small-landlord exemptions. Refusing to rent because of a person’s source of income is an unfair housing practice (24-34-502(1)(l)–(p)). Two exemptions matter for 1–20 unit owners. Subsections (1)(l)–(p) “do not apply to a landlord with three or fewer units” ((1.5)(a)). And an owner of “five or fewer single family rental homes and no more than five total rental units” doesn’t have to accept federal housing choice vouchers for those homes ((1.7)). Our reading: neither exemption mentions (1)(q), so the 200% and no-credit-score limits in 38-12-904(1)(c) still apply to any subsidized applicant you do screen. Confirm with counsel before relying on an exemption.
• Credit and rental history: seven years. You may not consider rental or credit history “beyond seven years immediately preceding the date of the application” ((1)(a)).
• Criminal history: five years, no arrests. You may not consider “an arrest record … from any time” or a conviction “more than five years before the date of the application.” Older convictions or deferred judgments can still be considered for methamphetamine manufacturing or distribution (18-18-405), possessing materials to make methamphetamine (18-18-412.5), sex-offender-registration offenses, and offenses in parts 1 or 6 of article 3 of title 18 ((1)(b)). Screening reports return what they find. Applying the look-back is your job.
• Credit checks themselves are fine, if you check everyone. Checking credit “is not an unfair housing practice … provided that the landlord checks the credit of every prospective tenant” (24-34-502(1.5)(b)), subject to the subsidy limit above.
• Protected classes. Colorado’s list (24-34-502(1)(a)) is longer than the federal one: disability, race, creed, color, sex, sexual orientation, gender identity, gender expression, marital status, familial status, veteran or military status, religion, national origin, and ancestry. None of these can appear as a reason, or be the real reason behind one.
• Sealed eviction cases. Colorado suppresses eviction court records while a case is pending and keeps them suppressed if the tenant wins (C.R.S. 13-40-110.5, per its Justia summary). If a report shows an eviction case with no judgment, verify the outcome before you treat it as a strike. We didn’t read the full section tonight.

• Portable tenant screening reports. A landlord “shall accept a portable tenant screening report” (38-12-904(1.5)(a)). You may require that it was completed in the last 30 days, that it costs you nothing to access, and that the applicant states nothing material has changed ((1.5)(b)). You can’t charge a fee to access or use it ((1.5)(c)), and you can’t charge an application fee to someone who provides one (38-12-903(2)(b)). Since January 1, 2026 (HB 25-1236), you can no longer require the report to come directly from the agency or a third-party site, and a subsidized applicant’s portable report doesn’t need credit history or a score (38-12-902(2.5)(e)(I)). TurboTenant’s portable-report guide (updated Oct. 26, 2026) dates that change “July 1, 2026 (HB23-1236).” The signed act says January 1, 2026, HB 25-1236.
• The exemption. You’re exempt from the portable-report rules if you accept only one application fee at a time per unit (or per applicant group) and refund the full fee within 20 calendar days after either side declines in writing ((1.5)(f)). App-collected fees go to the vendor, not you, so this exemption is hard to use with a per-applicant TransUnion fee. That’s our reading.
• The advisement. Before any screening step you expect to collect a fee for, you must tell applicants they may provide a portable report and that if they do, you can’t charge an application fee or a fee to access it ((1.5)(d)). It goes in ads, on your website’s home page, or on the application, “in at least twelve-point, bold-faced type,” or orally with written confirmation ((1.5)(e)).
• Application fees. A fee may only cover your actual or average processing cost, must be the same for every applicant across your units, needs a disclosure of anticipated expenses or an itemization, and needs a receipt. Any unused amount must be refunded within 20 days (38-12-903). Whether a fee the app charges and keeps is “charged or accepted by a landlord” (38-12-902(5)) wasn’t resolved. Our subleases page discusses the same question.
• New in 2026: what every application must disclose (HB 26-1196). New subsection 38-12-904(1.7) requires “all rental applications” to include (I) notice of “the information and data the landlord will attempt to access,” (II) “a general description of the factors the landlord will consider,” including credit, rental history, income, and criminal background, and (III) whether you use a third-party screening service “and if so, the name of the service.” It “does not require a landlord to adopt or disclose fixed disqualifying criteria.” Effective-date conflict: Section 4 of the signed act says “This act takes effect January 1, 2027.” The Division of Real Estate summary and the final fiscal note (Aug. 10, 2026) say June 2, 2026. We follow the act text. A one-paragraph disclosure costs nothing to add today, and it also becomes the reasons list your denial letters cite.

• Two TransUnion phone numbers. TurboTenant’s denial email shows 1-866-775-0961. Its dispute article shows 800-230-9376 (same PO Box and email). Use whatever number is on the report itself or on TransUnion’s rental-screening dispute page the day you send.
• The copy problem in TurboTenant. Colorado says the landlord “shall also provide a copy of the consumer report.” TurboTenant’s help says landlords shouldn’t forward reports and routes renters to Support. We didn’t resolve that conflict. The practical move is to send your letter within 20 days with the agency contacts and tell the applicant how to get the copy through TurboTenant Support. Ask TurboTenant Support, in writing, to enable the applicant’s access and to send an official copy, and keep that thread. If you can’t get a copy to the applicant, ask a Colorado attorney whether forwarding the PDF yourself is the safer side of the conflict.
• Avail’s and others’ old advice. A 2020 Avail community answer says “No explanation is required.” That was arguably true then, but it isn’t true in Colorado since HB 23-1099 (effective August 7, 2023) added the written-reasons rule.

• Start from TransUnion’s template, not a blog sample. SmartMove’s template adverse-action notice (Sept. 2023) has the right structure: transaction, action taken, “Principal Reason(s) for Action Taken” with checkboxes (for example “Income insufficient,” “Unable to verify income,” “Delinquent past or present credit obligations with others,” “Collection action or judgment”), an outside-source disclosure, the credit-score block, and a 1681m(b) checkbox. TransUnion “encourage[s]” attaching each report used and stating the principal reasons. In Colorado, both are required.
• The reasons should match your posted criteria. Use the same wording as your HB 26-1196 application disclosure and your criteria sheet, for example “Rental history: unpaid judgment to a prior landlord within the last 7 years (TransUnion eviction report, 2022 judgment).” Don’t mention anything tied to a protected class, and don’t give a reason you didn’t actually use.
• Add the Colorado lines the federal template doesn’t have: “A copy of the consumer report we obtained is attached [or: is available to you at …].” And: “You have the right to dispute the accuracy of the consumer report with the consumer reporting agency (C.R.S. 5-18-106).”
• Sign it as yourself or your LLC, with a contact address and phone, as the template requires. Date it. Keep the sent email (or the in-app message export) as proof of delivery.
• Couples and roommates. TurboTenant says decisions are “for each applicant individually,” and the FCRA notice belongs to each consumer whose report you used. Send each adult their own letter, with only their own report attached.

• Download first. RentRedi and (reportedly) Avail reports disappear after about 30 days. Save the PDF the day it arrives, in a restricted folder rather than a shared drive. See document vault for where each app stores uploads.
• The file for each applicant: the criteria version in effect (dated), the application, the portable-report or fee advisement they saw, the fee receipt, the report PDF, a one-paragraph decision note (criteria met or failed, items excluded under the 7-year and 5-year rules, whether the score was used), the denial letter, proof it was sent, and any dispute or reply. The same applies to the applicant you approved. That comparison is what shows consistency.
• How long. We found no Colorado retention rule for applications. The federal clocks are what matter: a HUD fair-housing complaint can be filed up to one year after the act (42 U.S.C. 3610), a fair-housing lawsuit up to two years (3613), and an FCRA suit up to five years after a violation (1681p). Keeping denial files about five years covers all three. Don’t use RentRedi’s delete button on denied applications.
• Disposal. Anyone holding consumer-report information “for a business purpose must properly dispose of such information,” for example by shredding or erasing it (16 CFR 682.3). When the retention period ends, delete the PDFs securely and shred any paper.
• Don’t share the report. TurboTenant: access “doesn’t automatically authorize you to distribute it to other individuals or third parties.” A co-owner who decides with you is a judgment call. A neighbor landlord isn’t.

Hypothetical, for arithmetic only. A three-bedroom house in Colorado Springs, listed at $1,850/month on TurboTenant Free (applicant-paid screening, $55 per adult on Free per our screening-costs page). The owner has two single-family rentals. Annual rent is 12 × $1,850 = $22,200, so the most income Colorado lets them require is 200% = $44,400 a year ($3,700 a month). The written criteria, posted in the listing and in the application text: income at least 2× annual rent (cash assets count); no unpaid judgment to a prior landlord in the last 7 years; criminal history considered only within 38-12-904(1)(b); screening by TransUnion through TurboTenant; portable reports 30 days old or less accepted with no application fee.

• Applicant A applies Tuesday, Nov 3, 2026. Income $46,800 a year (passes 2×). The TransUnion eviction report shows a 2022 El Paso County judgment for $3,140 to a prior landlord, unpaid. The owner decides on Tuesday, Nov 10 to deny. Colorado deadline: Monday, Nov 30 (20 calendar days). That day the owner clicks Deny applicant & send message (TurboTenant’s FCRA email goes out) and also emails a letter: reason “unpaid judgment to a prior landlord within 7 years (TransUnion eviction report),” the Colorado dispute advisement, and copy instructions. The owner also opens a TurboTenant Support ticket asking it to enable the applicant’s report access and send an official copy, and saves the ticket in the file.
• Applicant B earns $40,800 a year, below $44,400. Their ResidentScore is low, and the owner offers approval if a qualified co-signer signs. Because the score was part of the reason, this is FCRA adverse action even though it’s a yes. The offer letter includes the TransUnion contact block, the 60-day free-report and dispute rights, and the score, its range, date, and key factors copied from the report. B can’t find a co-signer by the stated date, so the owner sends a Colorado denial letter with reasons and the report-copy instructions within 20 days of that decision.
• Applicant C has a housing choice voucher. The housing authority pays $1,300 and C pays $550 a month. C’s share is $6,600 a year, so the income test is 200% × $6,600 = $13,200 a year, and C earns $15,000. The owner may not use C’s credit score or collections (38-12-904(1)(c)). The owner has two units, both single-family homes, so the source-of-income subsections and the voucher-acceptance rule are likely exempt. But having chosen to screen C, our reading is that (1)(c) still applies. C passes the lawful criteria and, as the first qualified applicant, is approved on Thursday, Nov 12. The file notes “credit score not considered: subsidy applicant.”
• Applicant D sends a TransUnion portable report dated Oct 20, 2026 (14 days old) and a signed no-material-change statement. No application fee is charged. D is the backup applicant. When C signs, D is denied on Nov 17 with the reason “another applicant who met the criteria was approved first.” D supplied the report, so there’s no landlord-obtained consumer report to copy, though including the FCRA block anyway is harmless. Deadline: Dec 7.

Wrong outcomes this avoids (example data):

• Using a “3× rent” rule from a vendor blog: requiring $66,600 a year ($5,550 a month) rejects Applicant A and anyone else between $44,400 and $66,600. Each is a 38-12-904(1)(d) violation: a $50 initial penalty, plus $2,500 if not cured within 7 days, plus economic damages and fees (38-12-905(5)), plus a possible Civil Rights Division charge.
• Relying on TurboTenant’s email alone for Applicant A: no reasons and no report copy. That’s a 38-12-904(2) violation worth $2,500 plus fees, or $50 if you cure within 7 days of the applicant’s notice.
• Using RentRedi’s Archive (silent reject) or TurboTenant’s “Deny without notification” on a report-based denial: no FCRA notice at all (willful: $100–$1,000 statutory damages per consumer, plus punitive damages and fees) and no Colorado notice ($2,500).
• Telling Applicant B “approved with co-signer” with no adverse-action notice, because “it wasn’t a denial.” The FTC lists a co-signer requirement as adverse action.
• Counting C’s 2023 collections or credit score: a (1)(c) violation, even though C was approved in the end, if it changed the terms offered.
• Charging D the $55 screening fee anyway: a 38-12-903(2)(b) / 904(1.5)(c) violation.
• Letting the RentRedi report expire after 30 days, or deleting a denied application: the file can’t show what you saw when a complaint arrives within the one- to five-year windows.

1. Before listing: write the criteria (income ≤ 2× annual rent, 7-year credit and rental look-back, 5-year criminal look-back with the listed exceptions, subsidy rules), date it, and post it.
2. Put the portable-report advisement in the ad or on the application in 12-point bold, and add the HB 26-1196 disclosure (what data, what factors, which screening service) to the application.
3. Confirm your fee setup: same fee for everyone, a cost disclosure, a receipt, and no fee for portable-report applicants.
4. Download every report PDF the day it arrives (RentRedi and Avail: about 30 days of access).
5. Apply the look-backs and the subsidy limits before deciding, and note any excluded items.
6. Decide, and write a one-paragraph decision note with the date. That date starts the 20-day clock.
7. Report used at all? Prepare the FCRA block: agency name, address, and phone; “did not make the decision”; free copy within 60 days; dispute right.
8. Score used? Add the score, range, date, source, and up to four key factors.
9. Colorado: list the reasons, attach a copy of the report (or arrange it through TurboTenant Support and document that), and add the 5-18-106 dispute advisement.
10. Conditional approval (co-signer, deposit, rent)? Send the adverse-action notice with the offer.
11. Send through the app and by email, one letter per adult. Never use the silent archive or deny options for a Colorado denial.
12. Calendar the deadline: decision date + 20 calendar days.
13. If an applicant sends a 38-12-905(2) notice, fix the problem within 7 calendar days. That caps the penalty at $50.
14. File: criteria version, application, advisement, receipt, report, decision note, letter, proof of sending, and replies. Keep about five years, then dispose of it securely (16 CFR 682).

• Does TurboTenant’s deny email satisfy the FCRA? It has the core 1681m(a)(3)–(4) items: the agency contact, “plays no part in the decision,” the free copy within 60 days, and the dispute right. It has no credit score disclosure, so add one if you used the score. It doesn’t satisfy Colorado’s requirements for reasons and a report copy.
• Do I have to say why in Colorado? Yes. Every denial needs a written notice that “states the reasons” (38-12-904(2)(a)(I)(A)), within a good-faith 20 calendar days.
• Is “approved with a co-signer” an adverse action? Yes, if the screening report was any part of the reason. The FTC lists requiring a co-signer, a larger deposit, or higher rent as adverse actions.
• Can I require 3× the rent? Not in Colorado. You can’t require income above 200% of annual rent, and for a subsidized applicant only 200% of their share. Savings count as income.
• Can I just ignore applicants I didn’t pick? Not in Colorado once they’ve applied and you’ve decided. “Another qualified applicant was approved first” is a reason, so send it.
• Can I email the TransUnion PDF to the applicant? Colorado requires you to provide a copy. RentRedi lets the applicant download it themselves. TurboTenant’s help tells landlords not to forward reports and routes applicants through Support. Document whichever path you use. If you can’t get them a copy within 20 days, get legal advice.
• What if the applicant disputes and the report gets fixed? TurboTenant says TransUnion “will notify the applicant” and provide an updated report. Nothing we read requires you to hold the unit or reverse the decision. Re-deciding on the corrected report, if the unit is still open, is the consistent choice. Record what you did.
• When does the HB 26-1196 application disclosure start? The act says January 1, 2027. The state’s summaries say June 2, 2026. Add it now.

• TurboTenant is the only one of the three that automatically adds FCRA language to a denial, and it won’t let you delete applicants. That’s good for records. Its weak point in Colorado is the report copy, which goes through Support.
• RentRedi gives you the most control over wording (an editable, saveable Reject template), and applicants can download their own report. The risks are the silent Archive option, the delete button, and the 30-day report window.
• Avail’s current decline flow couldn’t be verified tonight. Its public template uses generic bureau addresses and a “3×” income example, so rewrite both before using it in Colorado.
• In all three, the compliant Colorado denial is a letter you write. Build it once from the SmartMove template plus the Colorado lines, and save it as your RentRedi template or an email draft.

• HB 26-1196’s effective date conflicts across sources: the act says January 1, 2027, while the DRE summary and the final fiscal note say June 2, 2026. We didn’t check whether any other 2026 bill amended 38-12-904. Statute text otherwise is the 2025 C.R.S. on Justia.
• Our readings, all untested: that a “chose someone else” outcome is a Colorado “denial”; that the report-copy duty is triggered by obtaining a report even when it wasn’t used; that the 24-34-502 small-landlord exemptions don’t reach (1)(q); and whether app-collected screening fees are fees “charged or accepted by a landlord.”
• Whether 1681m(b) (non-agency information) applies to leases. Whether a TransUnion ResidentScore is a “credit score” under 1681g(f)(2)(A); we followed the FTC landlord guidance.
• Vendor items not confirmed: RentRedi’s default Reject text; whether TurboTenant’s denial email can be edited or carries reasons; whether TurboTenant landlords can download a report PDF (the blog says yes, while the help says renters get view-only access); Avail’s current decline notice, report window, and deletion rules (its help center moved and returned 404s); whether RentRedi’s Plaid income report or TurboTenant’s Snappt checks must be named as separate agencies in the notice; which TransUnion phone number is current.
• C.R.S. 5-18-106 (Colorado dispute rights) and 13-40-110.5 (eviction-record suppression) weren’t read in full. Colorado Civil Rights Division complaint deadlines weren’t checked.