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How should employers handle adverse actions under FCRA?

On Behalf of | May 26, 2022 | Fair Credit Reporting Act (FCRA)

If you want to apply for a new job, you may have to undergo a background check before an employer will hire you, which may include a look at your credit history. Fortunately, federal law grants you rights when it comes to an employer’s use of your credit report, including the right to receive notices before and after adverse actions.

According to Chron, an employer must secure your permission to look at your credit report. The Fair Credit Reporting Act regulates what your employer does next with your credit information, particularly as it relates to a decision to hire you or not.

Your right to pre-adverse notice

In the event an employer decides that your credit history does not make you a good candidate, you should know about the decision ahead of time. FCRA requires employers who make a negative assessment of an applicant based on credit history to follow certain procedures, which include notifying you about the adverse action. In addition, the employer has to give you a copy of your credit report along with a copy of the document “A Summary of Your Rights Under the Fair Credit Reporting Act.”

Your right to post-adverse action notice

Once the employer has taken action concerning your employment, you should receive another notice from the employer. This document must identify the credit reporting company that supplied your credit report and include contact information. The notice must state that the credit reporting bureau was not responsible for the employment decision and does not possess information about the employer’s decision.

If you feel the credit report did not accurately represent your credit history, you may take action to correct it. The notice should describe your rights to dispute the report. You can also request a free copy of the report from the reporting company. However, you must take this action within 60 days.

Your right to correct inaccurate information

Wrong credit information that costs you a job is a serious matter. According to FCRA, you have the right to dispute mistakes on your credit report. The credit reporting company must remove information that is wrong or not accurate in a 30-day period. Clearing up your report may make the difference in your efforts to find a well-paying line of work.