FCRA Checklist and FAQs for Employer Background Checks

This page turns the Fair Credit Reporting Act (FCRA) into a short hiring routine. Figures and dates are on the rules and numbers page.

The Consent-to-Shredder Screening Path

The Consent-to-Shredder Screening Path is our name for a routine that follows one applicant's background report from permission form to shredder.

1. Decide which jobs get a report and use one standard for every applicant for that job. In Illinois, check the credit-history limits first.
2. Give a stand-alone written disclosure and get written permission before ordering, outside the job application.
3. When ordering, certify to the agency that you made the disclosure, will follow the adverse-action steps and will not break equal-opportunity law, such as Title VII, the ADA and the ADEA.
4. Before turning anyone down over the report, send a copy and the agency's summary of rights. No wait is fixed by law; FTC staff says allow a reasonable time.
5. For an Illinois conviction decision, send a written preliminary notice, allow at least 5 business days to respond, then send a written final notice.
6. After the decision, send the adverse-action notice with the agency's contact details, a statement that it did not decide, and the free-report and dispute rights.
7. Keep applicant records 1 year, longer if a charge is filed (the EEOC's rule for covered employers).
8. Dispose of the report and data taken from it securely, by shredding or erasing.

Common mistakes

• Burying the permission form in the job application.
• Acting before sending the report copy and summary of rights.
• An after-action letter missing the agency's contact details, the "agency did not decide" statement or the free-report and dispute rights.
• Screening only some applicants, or using different standards by race, sex or age group.
• Ordering credit reports for jobs outside the Illinois list of allowed situations.
• Asking about arrests, asking about convictions before Illinois or Cook County rules allow, or rejecting over a conviction without written notice and 5 business days.
• Tossing intact reports in ordinary trash.

When to talk to an attorney

A CPA cannot answer legal questions like these, so employers commonly turn to an employment attorney for:

• A claim, class-action demand or regulator inquiry under the FCRA, the Illinois Human Rights Act or a Cook County or Chicago rule, or a conviction-based decision under any of them.
• Drafting disclosure, permission and adverse-action templates, or deciding whether a job fits a credit-history or criminal-history exception.
• Plans to resell consumer data, pull client credit reports routinely, or build a Red Flags program.

Frequently asked questions