Short answer: under the federal Fair Credit Reporting Act, an employer may get your credit report or another consumer report for a job only after it tells you in writing, in a document that is only about that, and you give written permission. If it plans to turn you down, or take another negative step, based in whole or in part on the report, it must first give you a copy of the report and a written description of your rights. Afterward it must send an adverse action notice with the reporting company’s contact details and your right to a free copy and to dispute. This page covers federal law only; other rules may apply where you live. It is general information, not legal or financial advice.
When the law applies
A reporting company may give a report to a person who intends to use it “for employment purposes” (15 U.S.C. 1681b(a)(3)(B), Cornell LII, read October 30, 2026). That term means a report used “for the purpose of evaluating a consumer for employment, promotion, reassignment or retention as an employee” (15 U.S.C. 1681a(h), Cornell LII). So the rules cover current workers as well as applicants. The CFPB says employment reports can include credit checks, criminal background checks, public records and information about your work history (CFPB, last reviewed December 31, 2024, read October 30, 2026; this page may be out of date).
Step 1: a separate notice and your written permission
Before it gets the report, the employer must give you “a clear and conspicuous disclosure” in writing, “in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes”, and you must have “authorized in writing” the report (1681b(b)(2)(A)). Your permission may be on that same document. The CFPB says: “An employer is required to get your written permission before running an employment report on you” (CFPB).
The law has a narrower process for some transportation jobs whose qualifications and hours are set under federal transportation law or by a transportation safety agency, when the only contact with the employer so far has been by mail, phone, computer or similar means. For those, the notice and your consent may be oral, written or electronic (1681b(b)(2)(B) and (C)).
The employer must also certify to the reporting company that it has followed these steps and will not use the report in violation of equal employment opportunity laws, and the reporting company must give the employer a summary of your rights (1681b(b)(1)).
Step 2: before the employer turns you down
Before taking any adverse action “based in whole or in part on the report”, the employer must give you (1681b(b)(3)(A)):
- “a copy of the report”; and
- “a description in writing of the rights of the consumer” under the law, as prescribed by the CFPB.
For a job, an adverse action includes “a denial of employment or any other decision for employment purposes that adversely affects any current or prospective employee” (1681a(k)(1)(B)(ii)). The CFPB says the employer must give you “A Summary of Your Rights Under the Fair Credit Reporting Act” before turning you down because of information in your credit report (CFPB, last reviewed December 31, 2024).
Step 3: the adverse action notice
If the employer then takes adverse action based in whole or in part on the report, it must give you (15 U.S.C. 1681m(a), GovInfo):
| The notice must include | Section |
|---|---|
| Notice of the adverse action, oral, written or electronic | 1681m(a)(1) |
| The name, address and phone number of the reporting company that supplied the report | 1681m(a)(3)(A) |
| A statement that the reporting company did not make the decision and cannot give the specific reasons | 1681m(a)(3)(B) |
| Your right to a free copy of your report from that company, with the 60-day period to ask | 1681m(a)(4)(A) |
| Your right to dispute the accuracy or completeness of the report with that company | 1681m(a)(4)(B) |
Lenders have the same duty after a credit denial; see loan application denied: the adverse action notice.
Your free copy, only for the math
This example is only for the math, and the date is an example date. You get an adverse action notice on March 2, 2027. The law lets you ask the reporting company for a free copy within 60 days after you get the notice (15 U.S.C. 1681j(b), GovInfo): March 2, 2027 + 60 days = May 1, 2027. Separately, you can ask for a free report once in any 12-month period if you certify in writing that you are unemployed and plan to look for a job within 60 days (1681j(c)(1)).
What can be in an employment report
The seven-year limit on older negative items, such as collection accounts, does not apply to a report used for a job with an annual salary that equals, or may reasonably be expected to equal, $75,000 or more (15 U.S.C. 1681c(b)(3), Cornell LII). For the limits that apply otherwise, see how long negative items stay on a credit report. The CFPB says hundreds of companies provide employment background checks and qualify as consumer reporting agencies, and that you can get free copies of your reports every 12 months from some specialty reporting companies, while others may charge a fee (CFPB).
Disputing an error
The CFPB’s tip is to check your credit before you start a job search and to dispute any problems with the credit reporting company and the creditor that provided the information (CFPB). A reporting company must investigate a dispute you send it (15 U.S.C. 1681i, Cornell LII); for the steps and time limits, see how to dispute a loan reporting error. To complain about a reporting company, use consumerfinance.gov/complaint.
Related guides
To get and read your reports, see check your credit report before a loan and credit report vs credit score. Collection accounts are covered in when a debt collector can report a debt, and medical bills in medical debt and your credit report.
Questions to ask the employer
- Which reporting company will supply the report, and what kind of report is it?
- Can I have a copy of the disclosure form I signed?
- If something in the report may count against me, when will I get a copy of it and the summary of my rights?
- Who can I talk to if the report has an error?
Checklist
- A separate written notice, then your written permission, before the report.
- A copy of the report and a summary of your rights before any adverse action.
- An adverse action notice with the reporting company’s contact details.
- A free copy within 60 days of that notice; dispute errors with the company and the creditor.
- This is federal law; ask a lawyer about other rules where you live.
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Sources
- Cornell LII: 15 U.S. Code 1681b, Permissible purposes of consumer reports (Fair Credit Reporting Act)
- Cornell LII: 15 U.S. Code 1681a, Definitions; rules of construction (Fair Credit Reporting Act)
- 15 U.S.C. 1681m, Requirements on users of consumer reports (Fair Credit Reporting Act), official text from the U.S. Code on GovInfo (2024 edition)
- 15 U.S.C. 1681j, Charges for certain disclosures (Fair Credit Reporting Act), official text from the U.S. Code on GovInfo
- 15 U.S.C. 1681c: Requirements relating to information contained in consumer reports
- 15 U.S.C. 1681i: Procedure in case of disputed accuracy (Fair Credit Reporting Act)
- CFPB: When I apply for a job, what do employers see when they do a credit check for employment and a background check? (last reviewed December 31, 2024)
- CFPB: Could I be turned down for a job because of something in my credit report? (last reviewed December 31, 2024)
- CFPB: Submit a complaint
Disclosure: Modern Lending Solutions is not a lender, loan broker or agent for any lender or loan broker, and does not make credit decisions. Any compensation we receive is paid by participating lenders, only for advertising services. This guide is general information, not financial or legal advice.