Fair Credit Reporting Act (FCRA) and Background Checks

Some say that background checks require compliance with the Fair Credit Reporting Act. This is sort of true. The act actually applies to background checks that use a "credit reporting agency" or CRA. However, you need not worry about the "compliance" factors if you conduct your own background checks or you do not use those credit reporting agencies.

What any employer must do is inform the potential employees whether or not there will be a background check and that the check will be considered in their hiring or not .

I have always been confused as to why employers use any sort of credit check on an employee.  There never has been any correlation between a person's credit and their ability to perform a job including trustworthiness.

A regular background check, however, that includes public records checks, should always be done as to verify past or present addresses and potential criminal activity.  Those factors actually make more sense concerning hiring rather than checking a credit report.

Some say that credit reports are very accurate concerning present and past addresses  and have up-to-date information.  This statement is only half true.  It only applies if you have any outstanding credit going on that you have updated the addresses on.  So if you are hiring conduct a background check - even a very basic one for 30 - 40 dollars can prove to save you a lot of trouble later.  Spend money on credit checks?  It is a waste of money for pre-employment purposes.  Employers do it now days because "that is what you do."

Whatever you do - Stay safe! 

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