What Is a Consumer Report for Employment? (2024)

FAQs

What Is a Consumer Report for Employment? ›

“Consumer report” is broadly defined and generally includes any communication of any information by a “consumer reporting agency” bearing on an individual's “credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living” that may be used to evaluate the ...

Employment background checks also are known as consumer reports. They can include information from a variety of sources, including credit reports and criminal records.

A consumer report can contain a wide variety of information including credit history, past bankruptcy, judicial records, employment records, and even online activity. This information can only be accessed with approval from the individual and is highly regulated by the Fair Credit Reporting Act (FCRA).

Employers in California are limited when they can request a consumer report, which essentially means a credit report. Under the CCRAA, employers must have a “legitimate business need” to access a credit record.

A consumer report is any written, oral or other communication of any information by a Consumer Reporting Agency bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living.

For example, if you apply for a job, the employer may request a consumer report to see if you have a history of being responsible with money or if you have a criminal record. Similarly, if you apply for a loan, the creditor may request a consumer report to see if you have a history of paying your bills on time.

Understandably, sometimes employers want to do background checks on their employees or on job applicants, including getting consumer reports, which may contain both credit histories and criminal records.

Consumer reports may not contain adverse information (including arrests that did not lead to conviction) more than seven years old with the following exceptions: bankruptcies may be reported for ten years; convictions may be reported without any time limitation; and.

How long do consumer credit checks take? After the candidate provides consent, the results of a credit check are typically available the same day. If you perform a credit check as part of a comprehensive background screening package, the final report may take anywhere from 1-5 days.

How far back does consumer reports background check go? ›

Although the FCRA does not impose a time limit on criminal convictions, employers using CRAs for background checks must follow stricter California state laws. California's Investigative Consumer Reporting Agency Act (ICRAA) generally restricts CRAs from reporting conviction records over seven years old.

If the information is to be used for an insurance transaction, the consumer must give consent to the user of the report or the information must be coded.

Depending on where you live, it's possible for bad credit to disqualify you from getting certain jobs. In some states, your credit can be the sole reason for the rejection, or a single contributing factor among many. Some employers may weigh your credit history more heavily for certain positions.

When you apply for a job, your prospective employer may use a consumer report to evaluate you as a potential employee. A consumer report is a collection of documents that may include credit reports, criminal and other public records such as bankruptcy filings, and records of civil court procedures and judgments.

Background checks and consumer reports are the same. The reason is that background checks are considered consumer reports under the Fair Credit Reporting Act (FCRA). Simply put, the term “Consumer report” is just another, less common way to refer to a background check.

Explanation: Consumer reports play a critical role in assessing an individual's eligibility for various services, including insurance. These reports compile information related to an individual's financial history, payment patterns, and overall creditworthiness.

Consumer Reports is an independent, nonprofit member organization that works side by side with consumers for truth, transparency, and fairness in the marketplace. Consumer Reports works to create a fair and just marketplace for all.