Ensure FCRA Compliance When Running a Credit Report

Completing a thorough background check on any new applicant before hiring the individual is extremely important, and for many jobs, running a current credit report is a large part of the background check process. If you do run a credit report on a new employee or applicant, you must make sure that you ensure FCRA compliance.

TruDiligence’s Tips to Ensure FCRA Compliance:

1) Make Sure You Have a Permissible Purpose

The FCRA only allows an employer to run a credit check if they have to do so for employment purposes. This includes hiring, retaining, transferring, or promoting new or existing employees. This means that you are now allowed to run credit reports on current employees as part of a review process.

2) Give Disclosure and Recieve Authorization

When you are looking to hire a new employee, you will be required to disclose early on in the process that their credit report will be pulled and analyzed. Furthermore, the applicant or employee will have to give you written authorization allowing you to pull their credit report.

3) Give Time When Making an Adverse Action

If you do obtain a credit report on an employee or applicant and have to make an adverse action because of it, there are a number of steps that will need to be followed to stay compliant with FCRA. This can include providing the consumer with up to five days to dispute the credit report with the credit-reporting agency.

Learn More From TruDiligence

If you plan to obtain credit reports on an employee or applicant, contact us to learn more about what you need to do to ensure FCRA compliance. TruDiligence is the best in the business, and we guarantee to help make the hiring process easier for your business than you could have ever imagined.


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