The Money Mentor: Why Your New Employer Can See Your Credit Report?

8 Nov

by: Lorillia Brown-Phillips, Your Black World, The Money Mentor

It was reported on the US Department of Labor website that employers added 80,000 jobs for the month of October.  If you were one of those candidates your current or potential employer may have asked your permission to do a background check before you were hired.  That background check could consist of your employment history, your driving record, your criminal records, and your credit report.   Your personal credit report will provide information on where you live, how you pay your bills, and whether you have filed for bankruptcy.  Many employers will allow your credit report to be an evaluating tool to help them decide if you will be considered for employment, retention, promotion or reassignment.

According to the FTC.gov, which is the  nation’s consumer protection agency, that enforces the Fair Credit Reporting Act (FCRA), a law that protects the privacy and accuracy of the information in your credit report.   Current or potential employers must get permission before accessing your credit report.  It is important to understand your rights as consumer, especially when employers use your credit reports and other background information as criteria on whether or not you are hired for the job.    FTC.gov states that there are 3 conditions employers must follow when accessing your credit report:

  1.  Notice and Authorization – Before an employer can ask for reports about you from any companies that provide them, it must tell you that it might use the information to make a decision. This notice is separate from other documents you get — like an application. An employer may not get a report about you for employment purposes without getting your permission or authorization first, usually in writing.
  2. Pre-Adverse Action Procedures –  If an employer might use information from a credit or other background report to take an “adverse action” — say, to deny your application for employment or a promotion, to terminate your employment or to reassign you — he must give you a copy of the report and a document called A Summary of Your Rights Under the Fair Credit Reporting Act before taking the adverse action. Read your report, and contact the company that issued it if you find inaccurate or incomplete information.
  3. Adverse Action Procedures  If an employer takes an adverse action against you based on information in a report, it must tell you — orally, in writing, or electronically. The notice to you must include:
  • the name, address, and phone number of the company that supplied the credit report or background    information;
  • a statement that the company that supplied the information didn’t make the decision to take the adverse action and can’t give you any specific reasons for it; and
  • a notice of your right to dispute the accuracy or completeness of any information in your report and to get an additional free report from the company that supplied the credit or other background information if you ask for it within 60 days.

About the Author:

Lorillia Brown-Phillips is a Financial Advisor and Author of “Jump Start Your Credit: How to Negotiate and Settled Your Debts in 10 Steps”, she can be reached at admin@brownassocllc.com or www.brownassocllc.com

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