Fair Credit Reporting Act (FCRA)

The Fair Credit Reporting Act (FCRA) exists to promote accuracy, fairness, and privacy of information in the files of consumer reporting agencies. Much of this law pertains to individuals and reporting agencies, but there are provisions that relate to businesses of any size.

For employers, there are a number of steps they must take before receiving a consumer report on a job applicant or a current employee.

  • Employers must tell applicants or employees they might use their consumer report on employment decisions. This must be in writing and a stand-alone format. This can’t be part of an employment application.
  • The employer must receive written permission to proceed.
  • The employer must then certify compliance to the company from which they are getting the information. This includes verification that you have notified the individual and received permission, complied with all FCRA requirements and will not discriminate against the individual.

If an employer has received a report and wishes to take adverse action because of it, they must take the following steps.

And then an employer must follow these steps after taking adverse action based on information from a consumer report.

  • Employers must give the applicant a notice of that fact.
  • Individuals then have certain rights to see the information that has been reported and to correct inaccurate information.


A Summary of Your Rights Under the Fair Credit Reporting Act

Using Consumer Reports: What Employers Need to Know

Background Checks: What Employers Need to Know