FCRA Guidlines

Note: The source of the following information is the Consumer Financial Protection Bureau in Washington, D.C.

This is an important point for employers: if a decision is made not to hire, not promote, or to terminate an individual based in whole or in part because of information contained in a background/credit check, then an “adverse action” letter must be sent to the individual by the employer outlining the individual’s rights under the Fair Credit Reporting Act prior to the actual denial of employment, promotion, or termination in order to give the individual time to dispute the proposed action before it’s carried out. The rights contained in the letter have been outlined in previous parts of this series and include such things having the right to a free file disclosure and the right to dispute incomplete or inaccurate information in the individual’s file, for instance.

Here’s another important point for job seekers to be aware of: if a consumer reporting agency, or, in some cases, a user of a consumer report, or a “furnisher of information to a consumer reporting agency” violates the provisions of the Fair Credit Reporting Act, the job seeker may be able to sue in state or federal court for damages.

Next, odd though this may sound, victims of identify theft and active duty military personnel have additional rights. They may be found at

Finally, “states may enforce the FCRA, and many states have their own consumer laws. In some cases, you may have more rights under state law. For more information, contact your state or local consumer protection agency or your state Attorney General.”

This is an important series of Blogs for both employers and job seekers. Just to illustrate how precarious an employment situation can be, suppose an employer has a credit report done on a candidate for employment as a matter of company policy. Then, suppose, as a result of the credit report, the employer decides to deny the job to the candidate without telling him the reason. That’s a clear violation of the Fair Credit Reporting Act! It makes sense, therefore, for employers and candidates for employment to know at least the basics of what’s contained in the FCRA.