Caution should be exercised when using credit reports for employment purposes.
The FCRA requires permissible purpose and several states have placed restrictions on the use of credit reports as a determining factor in employment and may also require additional disclosures on the consent form prior to even running this report.
Generally speaking, an employer should only use a credit report when it is specifically relevant to the job position and appropriate policies and procedures are in place to ensure proper use of the credit report as a factor for determining employment. Credit reports are most often used in the financial sector and positions with high fiscal responsibility, such as executive and senior management.
In addition to limitations placed by the FCRA and state legislatures, before an employer can gain access to a credit report as part of their background screen, Choice Screening will conduct an on-site inspection. During the inspection, employers must exercise proof of permissible purpose and business justification for the need to access employee’s credit history. Choice Screening is available to answer any questions you may have regarding proper use of credit reports.