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Can I check an applicant”s credit report?
Yes, but only if the applicant consents. Many employers comply with this requirement by including a standard request for consent in their employment applications. If you decide not to hire someone based on information in the credit report, you have to let the applicant know and explain his or her right to challenge the contents of the report.

You must respect applicants” privacy rights when conducting background checks.
When you are making hiring decisions, you might need a bit more information than your applicants provide. After all, some folks give false or incomplete information in employment applications. And workers probably don”t want you to know certain facts about their past that might disqualify them from getting a job. Generally, it”s good policy to do a little checking before you make a job offer.
However, you do not have an unfettered right to dig into applicants” personal affairs. Workers have a right to privacy in certain personal matters, a right they can enforce by suing you if you pry too deeply.

How can you avoid crossing this line?

Ask for consent. You are on safest legal ground if you ask the applicant, in writing, to consent to your background check. Explain clearly what you plan to check and how you will gather information. This gives applicants a chance to take themselves out of the running if there are things they don”t want you to know. It also prevents applicants from later claiming that you unfairly invaded their privacy. If an applicant refuses to consent to a reasonable request for information, you may legally decide not to hire the worker on that basis.

In addition to these general considerations, specific rules apply to certain types of information:

Credit reports. Under the Fair Credit Reporting Act, or FCRA (15 U.S.C. §1681), employers must get an employee”s written consent before seeking that employee”s credit report. Many employers routinely include a request for such consent in their employment applications. If you decide not to hire or promote someone based on information in the credit report, you must provide a copy of the report and let the applicant know of his or her right to challenge the report under the FCRA. Some states have more stringent rules limiting the use of credit reports.

Bankruptcies. Federal law prohibits employers from discriminating against applicants because they have filed for bankruptcy. This means you cannot decide not to hire someone simply because he or she has declared bankruptcy in the past.

If you want to research a job applicants” credit history – in other words, gain access to what otherwise is confidential information – you”ll need to get their consent. Use this form to obtain it:
(employee forms). This form lets the people who are charged with safeguarding an applicant”s confidential information know they”re on safe legal ground to provide it to you. Also, it eliminates any invasion of privacy claim the applicant may later try pin on you.

Important to Know:
If you hire someone outside your company to get this information, you must comply with the Fair Credit Reporting Act.

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