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Credit Check Limitations by State and Municipality

Author: XpertHR Editorial Team

Good credit requirements have been challenged under Title VII of the Civil Rights Act as having a disparate impact on minority job applicants and women, who statistically tend to be more likely to experience bankruptcies or damaging credit reports.

However, the Fair Credit Reporting Act (FCRA) does not prevent an employer from conducting third-party credit checks so long as the employer obtains the applicant's written consent and complies with the FCRA's notice requirements.

A number of states have gone beyond federal law and placed restrictions on when employers can conduct credit checks of job applicants or employees for screening purposes to certain types of positions. States that have no significant credit check limitations are marked N/A.

While these restrictions vary, they generally limit employer access to credit reports to positions involving financial institutions, the handling of sensitive data, jobs where the information is required by law, or where the applicant's credit report is otherwise substantially related to the current or potential job.