Basic Provisions/Requirements

The FCRA governs the activities of consumer credit reporting agencies as well as those of users of the information purchased from such agencies. An investigative consumer report contains information about a consumer’s character and reputation, as well as personal data obtained through personal interviews. An employer for use in screening the applicant often purchases a job applicant’s consumer credit report. The goal of the FCRA is to ensure that this information is used in a manner that is fair and equitable to the consumer regarding confidentiality, accuracy, and relevancy.

The FCRA states that employers must follow specific guidelines when requesting any credit information on an applicant or employee. Before obtaining a credit report on an employee or applicant, an employer must do the following:

• Make a clear and conspicuous written disclosure to the individual. The document must consist solely of the disclosure so that the person clearly understands that a credit report will be obtained.
• The disclosure should be mailed or otherwise delivered to the person who is the subject of the report no later than three (3) days after the date on which the report was requested.
• The disclosure must also state that the subject of the report may obtain from the purchaser (employer), upon written request, a complete disclosure of the nature and scope of the investigation.
• Get written authorization from the employee or applicants.
• If the subject requests a complete disclosure of the investigation, the purchaser (employer) is obligated to make a complete and accurate disclosure of the nature and scope of the investigation within five days of such request.
• If an applicant is denied employment based on information in the investigative consumer credit report, the employer must so advise the applicant, supply the name and address of the consumer reporting agency, and advise the applicant of his or her rights to obtain a free copy of a consumer credit report from the consumer credit reporting agency employed and to challenge the accuracy or completeness of any information in the report.
• Certify to the credit reporting agency that the above steps have been followed, that the information being obtained will not be used in violation of any federal or state equal opportunity law or regulation, and that, if any adverse action is to be taken based on a consumer report, a copy of the report and a summary of the person’s rights will be provided to that person.