Credit reports can affect more than loan applications
The Fair Credit Reporting Act permits consumer reporting companies to provide reports for defined purposes. These can include credit transactions, account review or collection, insurance, rental applications, government benefits or licenses, and certain employment decisions.
The user of a report must have a permissible purpose. A report should not be requested simply out of curiosity or obtained under false pretenses.
Employment access requires written consent
A prospective or current employer must obtain written consent before getting a consumer report for employment purposes. Separate disclosure and adverse-action requirements may also apply when report information affects an employment decision.
A credit report used for employment is not necessarily the same as a consumer credit score. State and local laws may further restrict employment use.
Review reports before important applications
Because report information can inform lending, rental, insurance, and other decisions, check it before a major application when practical. That allows time to investigate unfamiliar information and dispute factual errors.
If a decision is made against you based on a consumer report, federal adverse-action notices can identify the reporting company and explain rights to obtain the report and dispute inaccurate information.
What must an employer obtain before requesting a report for employment purposes?
- A verbal promise
- Written consent
- A credit score of 700
Reveal the answer
Written consent
The CFPB states that written consent is required before a prospective or current employer obtains a report for employment purposes.