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FCRA and Consumer Reports

Updated: Sep 14, 2023

What is the FCRA?

The Fair Credit Reporting Act (FCRA) is a federal law that protects the use of information collected by a consumer reporting agency (CRA) to make decisions such as extending credit, insurance underwriting, and employment. The FCRA regulates the way consumer data can be collected, reported, and shared. Read more about the history of the FCRA.

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What is a Consumer Report?

When a CRA reports certain information on individuals, it is called a consumer report. The subject of the report is the consumer and the party requesting the report is the end-user. The end-user has specific requirements under the FCRA such as certifying their permissible purpose under the FCRA for obtaining a report, providing disclosures to and obtaining authorization from the consumer, and following adverse action requirements.

For potential employees, a consumer report generally includes information about the individual’s “character, general reputation, and/or mode of living”. What does this mean for employment? An employment background check may contain information about criminal history, social security validation, motor vehicle reports, and credit history. Sometimes they include character references, employment verification, or degree verification. Employers should be mindful that additional disclosures are required for investigative consumer reports, which are a separate type of consumer report that seeks opinions from others on the consumer, such as references and some employment verifications. Employers seeking credit reports also must provide additional notices pursuant to state laws.

The FCRA contains many restrictions and requirements for CRA’s, including which information they can report and for how many years records can be reported. Understanding the FCRA requirements for employers is the first step to using consumer reports responsibly, however, it’s important to keep in mind that many states and cities have additional requirements that supersede the FCRA.


Sabrina Sawyer is the CEO of Integris and the VP of HR and Business Solutions at Associated Industries, a premier employer association located in Spokane, WA.

The information provided is not intended to constitute legal advice and is for informational purposes only. Employers are strongly advised to consult with legal counsel on matters related to the Fair Credit Reporting Act.


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