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Job Applicants Undergoing Background Checks Have Rights Under FCRA

Background checks during employment verification are common among a vast array of occupations and industries in the United States. Most workers have had to undergo a background check for a job at some time or another; however, many applicants are unaware of their rights under the Fair Credit Reporting Act (FCRA).

What is FCRA?

The Fair Credit Reporting Act of 2003 aims to protect consumers and promote accuracy, fairness, and privacy with regard to the information in the files of consumer reporting agencies that perform background screening duties.

The FCRA regulates credit-reporting agents to ensure the information they gather and provide to prospective employers is a fair and accurate summary of a consumer’s credit history.

What is a Background Check Used for?

A background check undertaken as part of the pre-employment process collects data to help screen applicants. Generally, a background check will provide the following information to prospective employers:

• Identity verification
• Social Security verification
• Employment verification
• Credit history
• Driving history
• Criminal records
• Education records

Job Applicants’ FCRA Rights

The Fair Credit Reporting Act bestows certain rights to job applicants, including:

• Consumers must be told if information in their files has been used against them.
• Consumers have the right to know what is in their files.
• Consumers have the right to ask for their credit scores.
• Consumers have the right to dispute incomplete or inaccurate information.
• Consumer reporting agencies must correct or delete inaccurate, incomplete, or unverifiable information.
• Consumer reporting agencies may not report outdated negative information. In most cases, a consumer-reporting agency may not report negative information over seven years old, and may not report bankruptcies older than 10 years.
• Access to consumer files is limited. Consumers must give consent for reports to be provided to employers.
• Consumers may limit “prescreened” offers of credit and insurance received based on information in a credit report
• Consumers have the right to a security freeze prohibiting a consumer-reporting agency from releasing information in a credit report without express authorization.
• Consumers have the right to seek damages from violators.

What is a Credit Report?

Essentially, a credit report is a snapshot of a consumer’s credit history. Credit reports can be thought of in simple terms, like a school report card, as they rate a consumer’s credit based on the following:

• Consumer’s accounts (all credit cards, auto loans, mortgage loans, personal loans)
• Repayment history (on-time vs. late payments)
• Derogatory accounts (accounts that have entered collections or are past due)
• Credit inquiries (records all names of companies who have pulled a consumer’s credit report for review)
• Public records such as bankruptcies and civil judgments

The data used to compile a credit report is consumer data extracted from various sources, like financial institutions, by credit reporting agencies. Once a credit reporting agency has the above consumer data, the agency will then compare the consumer’s credit performance against a scale, which produces a credit score.

Credit scores are important to consumers because they are used in determining a plethora of impactful life choices, such as purchasing a home or car, educational financing, credit card limits, applying for personal loans, and more.

North Carolina FCRA Class Action Attorneys

If your employment opportunity was compromised due to a violation of The Fair Credit Reporting Act, the trial lawyers at Whitfield Bryson LLP can help. Our lawyers have successfully obtained compensation for thousands of FCRA class action plaintiffs across the country. Contact us today for a free and confidential consultation.