Can my employer run a credit check on me?

If you’ve had financial issues, you might not want a potential employer to know–and you sure don’t want the jerk that’s your boss to know your private business. But more often employers and potential employers are pulling credit reports on you. This is especially common in workplaces where you may handle money, like a bank.

Under the federal Fair Credit Reporting Act (FCRA), an employer can only perform a credit check on you if you have given your permission. They may get it by adding a line into your job application, something like “by signing below, you authorize Acme Inc. to obtain credit reports.” If you are already employed and not sure whether your boss has authority to run a credit report on you, you can ask your human resources department.

But here’s the tricky part for employers. If they decide to take an “adverse action” (i.e. not hiring you, not promoting you, or firing you) as a result of information contained in a credit report, there are rules they have to follow:

  1. The employer must provide you with a copy of the report they used before they take the adverse action
  2. The employer must provide you with a notice explaining which credit reporting agency supplied the negative information, and that you have a right to dispute the accuracy of your credit report
  3. You are entitled to a free credit report within sixty days of the adverse action–even if you’ve already gotten your free credit reports from annualcreditreport.com. Just contact the credit reporting agency to order it

If they fail to give you the required notice, they may have violated the FCRA. Violations can result in being awarded actual damages, statutory damages between $100-$1000, and attorneys fees, which means you may only have to pay your attorney if you win your case. Contact us if your rights have been violated by your employer.

3 Responses to “Can my employer run a credit check on me?”

  1. JNoll

    I thought an employer can only run your credit check if and only if you are being hired into a position where you handle money or manage money etc?

    • David Friedman

      Nope. An employer can run a credit check if (but only if) they ask for your permission. The types of jobs you mentioned are the most common jobs that require a credit check, but there’s nothing that prevents other types of employers from asking you if they can check your credit. But just be careful, sometimes the permission is buried in the fine print of your job application. So make sure you read the whole thing before you sign it.

      If an employer checks your credit without your permission, it may be a violation of the Fair Credit Reporting Act. You can find out if an employer has checked your credit report by looking in the “Inquiries” section toward the bottom of your credit reports.

  2. Karon

    I have a problem with employers have the right to run my credit. If I cant get a job and everytime I apply for a job and they run my credit i lose a point so after 200 applications I have lose my credit and cant get a job and I have 37 thousand dollars in student loans. What am I and others like me suppose to do? If we really want to change our econamy we need to change the way things are done. We need to stop companies from having the right to invade our personal lives in order to aquire employment. I was asked so why have I not been working? Well we get stuck in a loop you need expiernce and out of school no experience so what is the point. All companies should go by a good or bad system. Even the way things are done now, I know that employers have a hard time finding good employees. So if their system is not working it needs to be changed.