Excerpted from a 10NEWS story by Emery Winter and Mauricio Chamberlin
The pandemic, layoffs and other changes to the labor market have forced many people to apply to new jobs in the past few years.
One viewer who was going through the hiring process said a potential employer asked to look at her credit. She asked if that’s legal.
Can employers in most states request access to your credit report?
Yes, in most states, employers can ask for your permission to access your credit report.
WHAT WE FOUND
There is no federal law prohibiting employers from running a credit check, and it’s legal in most states. Still, federal law requires employers follow specific rules before they can see a person’s credit report, including getting their permission.
At least a dozen states and cities ban employers from requesting credit reports altogether, with a few exceptions for some employers — usually those in the finance industry and government.
Experts say overall, the practice is relatively rare and is typically used for positions in finance and money management.
The Fair Cree Fair Credit Reporting Act requires employers to ask for your written permission before they can check your credit. You can deny the request, but the employer can choose to not hire or promote you as a result.
If the employer chooses to not hire you because of something they saw in your credit report, they can’t reject you right away. Before they can do that, they must:
- Notify you that they intend to reject you because of something in your credit report;
- Include a full copy of your credit report, a summary of your rights from the Federal Trade Commission (FTC) and contact information for the company that provided them the report;
- Give you an opportunity to correct any potential mistakes or errors on your credit report, or to provide context for any negative details in your credit report;
- Provide an oral or written explanation of their final decision to reject you.
Employers must also be wary of anti-discrimination laws when running credit checks, the Equal Employment Opportunity Commission (EEOC) says. So an employer can’t set different credit requirements for different groups of people applying for the same job, and they can’t have credit requirements that specifically disadvantage certain groups of people.
At least 11 states and four major cities have laws limiting or banning employer credit checks. They are:
New York City
Washington, D. C.
For more information on your own state’s laws regarding employer credit checks, consult your state’s office of labor.
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