In most states, checking an employee’s credit report is considered a permissible purpose. Employers check employee’s credit reports to assess the overall risk of the employee. Employees with better credit reports are generally deemed to be more responsible and organized. Whether or not you agree with this assessment, you need to be prepared. If you are currently looking for a job, or your current employer decides to check your credit report, it is imperative that your credit report be as strong as possible. This includes making sure that your credit report is accurate and also that you manage your credit accounts responsibly (Learn more about credit repair).
Conditions for Furnishing and Using Consumer Reports for Employment Purposes:
A consumer reporting agency may furnish a consumer report for employment purposes only if the employer who obtains such report from the agency certifies to the agency that the employer has complied with the disclosure requirements in the Fair credit Reporting Act with respect to the consumer report, and that the employer will comply with the conditions for adverse actions, if applicable, with respect to the consumer report. The employer is not permitted to use information from the consumer report in violation of any applicable Federal or State equal employment opportunity law or regulation; and the consumer reporting agency must include a summary of the consumer’s rights with the report.
The Consumer Must Provide Permission in Writing:
Generally, a person may not procure a consumer report, or cause a consumer report to be procured, for employment purposes with respect to any consumer, unless a clear and conspicuous disclosure has been made in writing to the consumer at any time before the report is procured or caused to be procured, in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes. The consumer must provide written authorization to the employer before the employer may procure the credit report.
What if Your Employer Takes an Adverse Action Against You Based on Your Credit Report?
Before taking any adverse action based in whole or in part on the report, the employer intending to take such adverse action must provide to the consumer to whom the report relates a copy of the report. The employer must also provide a description in writing of the consumer’s rights under the Fair Credit Reporting Act.
Do Not Take Any Unnecessary Chances:
If you have not checked your credit report lately, you should. Studies show that only about ten percent of consumers check their credit reports regularly. Before you potentially lose an opportunity for a new job, or even possibly lose the current job you have, check your credit reports and take proactive steps to make sure that your credit reports are as strong as possible.