A Credit History Check offers insight into an applicant's fiscal responsibility and financial history. Credit report results typically include address history, alias names, charge-offs, collection accounts, monthly payment history, eviction, and other financial events.
The FCRA requires permissible purpose to pull a credit report. Several states have placed restrictions on the use of credit reports as a determining factor in employment. These states may require additional disclosures on the consent form prior to running a credit report. An employer should only use a credit report when it specifically relates to the job position. Employers must have appropriate policies and procedures in place to ensure proper use of the credit report as a factor for determining employment. Employers in the financial sector most often use credit reports. They also use them for positions with high fiscal responsibility, such as executive and senior management positions.
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Site Inspection required for Employment Credit Reports
All federally regulated credit bureaus require a virtual or onsite inspection of your principal office or residence before allowing clients access to a pre-employment credit report. You must complete this inspection if you have a home office. If you wish to have direct access to an applicant's credit report to make an employment decision, the credit bureaus now require a site inspection. This requirement helps protect the public from unscrupulous businesses that seek access to consumer credit reports. During the inspection, employers must prove permissible purpose and business justification for needing access to employees' credit history.
What is required during the site inspection?
A third-party licensed inspector approved by the bureau will visit your office or home (wherever you primarily operate). They may also schedule a virtual web call to verify the following:
- That you can store consumer credit files securely in a locked location (room, drawer, filing cabinet, safe, etc).
- That you operate legally and do not run an unauthorized business. Examples include massage services, credit counseling organizations, law enforcement agencies, private investigators, tattoo services, bail bondsmen, adult entertainment, credit repair, credit resellers, news agencies, journalists, or dating services.
Note: The Inspection Fee will be passed on to the client prior to scheduling a site visit to meet this requirement.
