Job applicants and credit checks

Friday, January 27, 2012

An increasing number of states have enacted (or are planning to enact) laws that restrict the use of credit reports in hiring decisions. These laws typically have exemptions for certain jobs, such as positions with fiscal responsibility, that handle cash or that are involved in law enforcement.

The Fair Credit Reporting Act (FCRA) requires employers to get the consent of employees and job applicants before the employer can check credit or consumer reports. Employers also are required under federal law to let employees and applicants know if information contained in the reports led them to take "adverse action" such as a decision not to hire or to terminate or downgrade the role of a given employee.

But your state may have stronger protections. To find out about your state's position on the use of credit reports in hiring, visit the National Conference of State Legislators website.