May an employer check an applicant's credit as a condition of employment?

Author: Jessica Sussman

Yes, but the employer must follow Fair Credit Reporting Act (FCRA) guidelines, including getting the applicant's written approval before running the report. The employer also must provide the applicant with a warning and a copy of the report if the employer plans to reject the applicant based on the results, and give the applicant an official adverse action notice if it does not hire him or her because of the contents of the report.

Some states have passed legislation limiting employers from running credit reports, or making hiring decisions based on such reports, unless the job sought involves financial responsibility or the handling of sensitive data. If the employer's state prohibits the use of such reports for other positions, the employer then may not check an applicant's credit.