By: Richard L. Smith
In an effort to ease barriers to affordable housing, a bill sponsored by Senator Renee Burgess has gained momentum in the New Jersey Legislature.
The Senate Community and Urban Affairs Committee recently approved a measure, that would prohibit landlords from conducting hard credit checks on applicants seeking low- to moderate-income housing.
According to a statement released by the Legislative House, the proposed bill—S3865—seeks to replace hard credit inquiries with soft credit checks during the tenant screening process.
Unlike hard checks, which can lower a person’s credit score, soft checks do not impact credit and still provide landlords with relevant financial information.
Senator Burgess emphasized that the current system disproportionately harms tenants, especially in a tight housing market where applicants often apply to multiple properties in search of available and affordable units.
“The tenant screening process often creates unnecessary barriers for residents needing affordable housing,” said Senator Burgess. “Casting a wide net is how many New Jerseyans navigate our housing crisis. Applicants shouldn’t be penalized just for trying to secure a home.”
Under the legislation, landlords found to be in violation of the restriction on hard inquiries could face fines up to $100 for a first offense within a year and as much as $200 for any additional violations in that timeframe.
The bill highlights the unequal impact of hard credit checks, particularly in cities like Newark, Paterson, and Trenton, where Black and Latino residents are more likely to face systemic credit disadvantages.
These communities are also more reliant on housing assistance and are at greater risk of being disqualified based on credit criteria that do not accurately reflect their reliability as tenants.
“Credit scores are designed to assess debt repayment, not someone’s potential as a responsible renter,” Burgess said. “Many people with lower credit scores have stable incomes, good references, and solid rental histories.”
The bill also includes a provision requiring credit bureaus to count multiple housing-related credit checks within a 30-day period as a single inquiry, similar to existing policies for mortgage and auto loan applications.
This aims to further shield applicants from cumulative credit damage when applying to several housing units at once.
To ensure public awareness, the legislation mandates that the New Jersey Division of Housing and Community Resources post relevant information about the new regulations on its website within six months of the bill’s passage.
With the state continuing to grapple with one of the highest eviction rates in the nation and a persistent shortage of affordable housing, supporters of the bill say the measure is a step toward fairness and transparency in the rental market.