Are your employment reports FCRA-compliant?

You might be noncompliant without knowing it.

Standard credit report vs. employment report

The credit report you pull to make lending decisions is not the same as the report you run for employment purposes. If you’re using them interchangeably, then you are not adhering to FCRA requirements.

When obtaining a consumer report for employment purposes, you must:

• notify the individual in writing that you plan to pull a consumer report.
• receive the individual’s written authorization.

If you decide not to hire the individual, you must:

• provide a special “pre-adverse-action notice” before taking adverse action based on an employment report; this notice includes a copy of the consumer report and a summary of the individual’s rights under the FCRA.
• provide an adverse action notice after taking adverse action against the job applicant.

Equifax helps you stay in compliance.

Persona from Equifax takes the guesswork out of FCRA guidelines. A credit report designed specifically for employment purposes, Persona will keep you in compliance by including the mandated disclosure statement and excluding an individual’s FICO® Score. This is key because employment is not a permissible purpose for gaining an individual’s credit score.

Important takeaways

• When you run a standard credit report in place of a Persona report, you generate a hard inquiry on the job applicant’s report, which can be detrimental to their credit score.
• Per FCRA regulations, an employer may not run a standard credit report for employment purposes. Otherwise, employers could make hiring decisions based on an individual’s FICO® Score.

We’re here to help you stay in compliance. Let’s discuss how to ensure your work processes are in sync with FCRA guidelines.