Everything You Need to Know About FCRA-Compliant Background Checks

FCRA-Compliant Background

FCRA-Compliant Background

When you’re an employer, part of the hiring process includes running background checks on potential candidates. Does this ensure that you’re onboarding the best possible person for the job and protecting your business from any future legal trouble? Absolutely. There are different types of background checks, with FCRA-compliant being one kind. Let’s explore the FCRA a little further to understand what sets it apart.

What is the FCRA?

The Fair Credit Reporting Act (FCRA) was enacted to protect consumers from having false or misleading information used against them on consumer credit reports. The FCRA asks that “consumer reporting agencies” (CRAs or background check companies) and employers follow a standard of rules when conducting background checks. This helps ensure that accurate and true information is being reported.

Why Does FCRA Compliance Matter?

If you plan on running credit checks or collecting information that could be used to deny someone employment, then you’ll need to comply. The FCRA protects job applicants and employees from having their reports unfairly used against them. For example, if an employer were to deny someone a job based on information found in their background check report, the FCRA gives that person the right to know what was reported and how it was used to make the decision.

Compliance with the FCRA also helps protect your business from potential lawsuits. If you use a consumer reporting agency that is not FCRA compliant and someone’s rights are violated, you could be held liable. This is why it’s important to work with a professional company for employment screening services. They will have the proper procedures in place to help protect your business.

How to Comply with the FCRA?

  1. Provide written notice to the applicant explaining that information obtained in their consumer report may be used for employment-related decisions. The notice must stand alone and cannot be included in the employment application.
  2. Get the applicant’s written permission to obtain the consumer report. It should include a clear and conspicuous statement that information in the consumer report may be used for employment purposes and that the applicant grants permission to obtain and use the report.
  3. Once you obtain the applicant’s written consent, you can request a background check. After receiving the results, if you intend to take adverse action based on the background check findings, you must give the applicant a “pre-adverse action notice.”

Apart from that, it will also help if you know what’s included in an employment background check, as this will give you a better idea of what to expect. And when in doubt, always consult with a professional to ensure that you’re following the FCRA rules and regulations.


There you have it! Everything you need to know about FCRA-compliant background checks. As an employer, it’s important to understand the FCRA and how it impacts your business. By following the tips above, you can ensure that your business is compliant and protect yourself from any potential legal trouble down the line.

Bruce Reyes

Bruce Reyes