Applying for a job often involves a consumer report as part of pre-employment screening. This report helps employers evaluate a candidate’s background and suitability for a role beyond what is presented on a resume or during an interview. Understanding the contents of this report and how the information is used is important for job seekers. This article clarifies what employers see when they obtain a consumer report and the legal framework governing this process.
Defining the Consumer Report and Legal Context
A consumer report, in the context of employment, is a broad legal term for a document compiled by a third-party Consumer Reporting Agency (CRA). It is not limited to a financial credit score. This report includes information about an individual’s character, reputation, personal characteristics, or mode of living. When an employer uses a service to compile details like criminal records or employment verification, the resulting document is legally classified as a consumer report.
The Fair Credit Reporting Act (FCRA) is the primary federal law regulating how these reports are obtained, used, and maintained. The FCRA promotes the accuracy, fairness, and privacy of consumer information used for employment decisions. Under this act, employers must provide a written disclosure to the applicant and obtain written consent before procuring the report.
Types of Reports Employers Utilize
Employers may request several types of reports depending on the job and regulatory requirements.
Criminal History Reports search various databases, ranging from local county court records to national databases, to identify a candidate’s record of offenses and past legal issues.
Employment and Education Verification confirms the accuracy of information provided on the job application by contacting former employers and educational institutions to verify dates of employment, job titles, and degrees obtained.
Motor Vehicle Records (MVRs) are often requested for positions involving driving roles and show license status, traffic infractions, and any license suspensions or revocations.
Financial or Credit Reports are utilized, but their use is highly restricted and often reserved for specific roles involving financial trust.
Detailed Content of Standard Background Checks
Standard consumer reports focus heavily on criminal history and the verification of professional and academic claims. A criminal data check typically shows records of misdemeanor and felony convictions, as well as any pending cases. The report specifies the type of offense, the date of disposition, and the jurisdiction. Arrest records that did not lead to a conviction are often legally excluded or heavily restricted depending on state laws.
Verification data confirms the information provided on the resume and application. Employment verification confirms dates worked and job titles held. Education verification confirms degrees obtained, dates of attendance, and major fields of study. This data helps the employer confirm qualifications and assess past work history.
Understanding Employment Credit Checks
Employment credit checks are specialized consumer reports providing insight into a candidate’s financial history and responsibility. These checks are generally limited to positions involving financial oversight, access to company funds, or roles requiring fiduciary trust. Many states restrict or ban the use of these reports for general employment decisions.
When obtained, the credit report usually shows debt history, payment patterns, and public records like bankruptcies or civil judgments. It may include information on current credit accounts, outstanding balances, and accounts placed for collection. The employment credit report does not show the applicant’s credit score, specific account numbers, medical debts, or personal information like marital status.
Information Employers Cannot Access
Specific categories of personal information are legally protected or time-barred from being reported to potential employers. The FCRA generally prohibits Consumer Reporting Agencies from reporting most negative information older than seven years. This seven-year limit applies to civil suits, civil judgments, accounts placed for collection, and paid tax liens.
Bankruptcy is an exception, which can be reported for up to 10 years. Federal and state laws also exclude information regarding sealed, expunged, or non-conviction arrest records from the consumer report. Highly restricted personal data, such as medical history, age, or marital status, is not included in a standard consumer report for employment purposes.
Your Rights Regarding the Consumer Report
The FCRA grants job applicants specific rights to ensure fairness and transparency during the screening process. An employer must provide a clear, written disclosure and obtain signed authorization before requesting a consumer report. This disclosure must be a stand-alone document, separate from the job application.
If an employer decides not to hire you based on the report, they must follow the “adverse action” process. This begins with a pre-adverse action notice, which includes a copy of the report and a summary of your FCRA rights. This notice gives you time, typically five business days, to review and dispute inaccuracies. If the employer proceeds with the decision after the waiting period, they must send a final adverse action notice. This final notice confirms the decision and provides the contact information for the Consumer Reporting Agency. Applicants maintain the right to dispute any incomplete or inaccurate information directly with the reporting agency, which must then investigate the claim.