Were you denied a job or promotion because of your credit report?
Can an employer pull your credit report?
Yes, but only with your permission. As a general rule, your credit report can only be released pursuant to a “federally permissible purpose.” These purposes are listed in the Fair Credit Reporting Act (“FCRA”). One purpose for which your credit report may be released is in connection with employment. In order to obtain your credit report an employer must first certify to the credit reporting agency that it has advised you that it intends to obtain your credit report, that you have consented in writing to the release of your credit report and that it will give you a written notice of your rights under the FCRA. Once the employer complies of these requirements, it may play your credit report.
If the employer does not hire you, then it must give you a copy of your credit report and another set of notices that discuss your rights under the FCRA. This is called adverse action. Before taking any adverse action towards you based in part on your credit report, the employer might share the credit report with you and give you an opportunity to respond. The statute also applies to employees whose credit reports are pulled in connection with promotions.
Why it’s important to know your employment rights under the Fair Credit Reporting Act
Over the years, an increasing number of employers have been using credit reports as part of their hiring process. It’s been a hot topic in the last several years. Some argued that there is no correlation between credit score and job performance. In any event, if the employer complies the statute, it has a right to pull your credit report. If something is on your credit report that doesn’t belong to you, it could cost you a promotion or even a job opportunity.
The employer’s duties prior to taking an adverse action against you
Under the FCRA, employers are required to provide notices to you prior to taking any adverse employment action whenever that decision is based even just part of the consumer report. Employers are required to make this disclosure any time they deny employment, promotion, or a job transfer to a current or prospective employee.
As part of this pre-adverse action notice, the employer must provide to the consumer/employee a copy of the credit report itself and the FTC Summary of Consumer Rights. An employer the fails to comply with the law is liable to you under the Fair Credit Reporting Act for statutory damages or actual damages plus costs and attorney’s fees.
What are your rights if you been denied employment or promotion to impart your credit report?
If you been denied employment or promotion to in part your credit report, you have a right to see that credit report. You should review your credit report and dispute anything on it that is not 100% accurate.