Documents & Resources
10 Steps to FCRA Compliance
1. Provide written disclosure
Provide written disclosure to applicant/employee. Before performing a background check or submitting personal information to a Credit Reporting Agency (CRA), employers must notify the applicant/employee in writing with an explanation of the process. The applicant/employee must understand that the results of the background check will be used as a basis for hiring, promotion, or retention.
2. Obtain authorization
Obtain authorization from applicant/employee. After disclosing the intent to perform a background check, employers must obtain written authorization from their applicants/employees that acknowledges that the report may be used for employment decisions. If an employer wants consent to screen employees for the duration of the employment period, this must also be indicated in the authorization.
3. Provide applicant information
Provide applicant/employee information to Credit Reporting Agency (CRA). Once an employer has obtained written consent, information about the applicant/employee may be provided to the Credit Reporting Agency (CRA) or screening company.
4. Background Check and report
Background check and background report. After a third-party agency has received the request for a background check, the agency can begin collecting and preparing a background report. Background reports may include credit history, criminal history, civil judgments, and other personal information on public record.
5. Return report to employer and candidate
Report is returned to employer and employee/applicant. Once the background report is completed, a copy may be returned to the employer and if requested, to the employee applicant for review.
6. Employer review of background check
Employer review of background check. An employer may be looking for red flags or issues that could turn up in a background check. Some employers will use credit history to evaluate candidates. If an employer determines that any information from the background report may adversely impact the employment decision, they must follow additional steps to ensure compliance.
7. Notification of adverse action to candidate
Notification of adverse action to applicant/employee.
Examples of adverse action steps include: refusal to hire, failure to promote, or termination of an existing employee. If an employer decides to proceed with an adverse action based either in whole or in part, on a background report, the applicant/employee must be notified in writing.
8. Provide opportunity to dispute
Opportunity to dispute information. Employers must give employees ample time to review any disputed information and report any issues with the report to the employer. The FCRA recommends a waiting period of five business days before pursuing adverse action.
9. Re-investigate of disputed items
Re-investigation of disputed items. If any items on the report are in dispute, a background screening company can re-investigate those items and provide an updated report to both employer and applicant/employee.
10. Review and finalize decision
Review and finalize employment decision. If an employer has followed all steps in conducting a background check, then an adverse action can be completed. A final employment decision can be made and if that decision is adverse, the employer should send a notice of adverse action to the applicant/employee.
Helpful Resources
Helpful Downloads and Documents
Notice Regarding Obligations
Notice Regarding Obligations to Users of Consumer Reports under the FCRA
Sample - Background Check Disclosure & Authorization
Download an Authorization Form
Summary of Your Rights
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