All articles 6 min read

Employment Background Reports: Permission, Adverse Decisions, and Disputes

This guide presents selected U.S. government consumer education from Federal Trade Commission and CFPB. References to “we” or “us” in the source material refer to the issuing agency. Source dates and links appear below.

Employer Background Checks and Your Rights

Are you applying for a job or a promotion? Employers might run a background check on you, and if they do, the Fair Credit Reporting Act gives you rights. Employers must get your written permission before running a background check with a background reporting company. You have the right to say no, but if you do, you may not get the job.

What Employers Might Ask About Your Background

Employers might ask you about or check your background for things like your

  • employment history
  • education
  • criminal or other public records
  • financial or credit history
  • public social media activities

Laws in your city or state might impact if or when employers can ask about your criminal or credit history.

Background Reporting Companies

If employers use a background reporting company to get background and history information about you when you apply for a job, they have to follow certain rules:

  • The employer must tell you they could use the information to make decisions about hiring, promoting, or firing you. They must give you this information in writing in a standalone document. They must also get your written permission before asking the company to run a background check.
  • An employer must take certain steps before they decide not to hire, keep, or promote you because of something in the report. They must give you a copy of the report and a “Summary of Rights” that tells you about your rights under the Fair Credit Reporting Act.

What To Do Before You Apply

  • Check your credit report. That way, you’ll be able to dispute any mistakes before an employer sees them. To get your free credit report, go to AnnualCreditReport.com, or call 1-877-322-8228.
  • Check local laws.  Some cities and states have specific requirements covering what employers can ask about your credit history or possible criminal records, and when in the hiring process they can ask those questions.

If You’re Turned Down for a Job or Promotion

If you don’t get a job or a promotion because of information in your background report, the employer must give you the following information verbally, in writing, or electronically:

  • the name, address, and phone number of the background reporting company
  • that the background reporting company didn’t make the decision about not hiring or promoting you and can’t give specific reasons for it
  • that you have the right to dispute with the background reporting company any information on your report that’s inaccurate or incomplete. You can do this by contacting the background reporting company and following the company’s instructions for disputing information.
  • that you have the right to get an additional free report from the background reporting company. You must ask for it within 60 days of the employer’s decision.

When you get your background report, review it carefully. If you think there are mistakes, contact the background reporting company to explain the mistakes and ask that they fix them. Include any supporting documentation you have with your request. If the background reporting company informs you that it has revised your report, review the report to make sure the mistakes are gone. Ask the background reporting company to send a copy of the corrected report to the employer and tell the employer about the mistake.

Protect Your Privacy

  • Don’t put your Social Security number or banking information on an application or resume. If a company asks you for this information before you even interview, it’s probably a job scam. Employers may ask for your Social Security number during the interview process to run a background check. Once you’re hired, they may ask for your banking information so you'll be able to get direct deposit for your paychecks.
  • Be mindful of what you share on social media and other places online. If you don’t want potential or current employers to see something you say or do, think about not posting it, or limiting who you share it with.

Report to the FTC

If an employer got your background report without your permission, or rejected you without sending you the required notices, report it to the FTC at ReportFraud.ftc.gov. Also tell the FTC if you think a background check company included errors in your background check.

Keep in mind that the information in this article is not legal advice. For that, you’ll need to consult an attorney. 

When I apply for a job, what do employers see when they do a credit check for employment and a background check?

Employment reports often include credit checks, criminal background checks, public records–such as bankruptcy filings and other court documents–and information related to your employment history.

Hundreds of companies provide employment background checks and qualify as consumer reporting agencies. An employer is required to get your written permission before running an employment report on you. They’ll likely have you sign a form giving them permission to run an employment background check.

Generally, if an employer wants to use the information from the report to take an “adverse action” against you, such as not hiring you, it must give you a copy of the report it received. You will also receive an “adverse action notice” when the employer makes their decision against you. The adverse action notice will include the name and contact information of the consumer reporting agency from which the employer got the consumer report.

Tip

Check your credit before starting a job search. Review your credit reports closely for mistakes or missing items and dispute any problems with the credit reporting company and the creditor that provided the information.

Just like with the big three consumer reporting agencies, you can get free copies of your reports every 12 months from many of the specialty consumer reporting agencies. Other specialty consumer reporting agencies may charge you a fee for your report. Keep in mind that not every agency will have information on everyone.

We’ve put together a list of some of these specialty consumer reporting agencies, along with some information about how you can obtain copies of your reports.

Tip

Many employers now use third-party consumer reports to make employment decisions about their current workers as well. These reports increasingly extend beyond traditional background checks and may encompass a wide range of information and assessments about workers. Employers must obtain worker consent, provide transparency about consumer reports used in adverse decisions, and allow workers to dispute inaccurate information.

Could I be turned down for a job because of something in my credit report?

Generally, yes. Many employers will look at your credit report as part of an employment background check. If you’re turned down for a job because of something in your credit report, they must notify you.

Tip

Check your credit before starting a job search. Review your credit reports closely for mistakes and dispute any problems with the credit reporting company and the creditor that provided the information.

Hundreds of companies provide employment background checks and qualify as consumer reporting agencies. Employment reports often include credit checks, criminal background checks, public records – such as bankruptcy filings and other court documents – and information related to your employment history.

Employers can obtain your credit report under the Fair Credit Reporting Act (FCRA) with your written permission, which they often do by asking you to sign a form allowing them to run a credit check. However, employers may be governed by other federal or state laws that may affect whether and how they can use this information.

If they pull your credit report, an employer must give you a copy of the report they looked at. They must also give you “A Summary of Your Rights Under the Fair Credit Reporting Act ” before turning you down because of information in your credit report.

Sources and publication details

The federal agency source text is U.S. government work in the public domain. Fynoptic selected, adapted, and formatted it for this guide. No agency endorsement is implied. Follow the linked sources for current program details and the rules applicable to your circumstances.

Back to all articles