The Fair Credit Reporting Act is the federal statute governing consumer reports, and despite the name it covers far more than credit. Any report an outside agency assembles about a person for employment purposes is a consumer report and falls under it. This page sets out what the Act actually requires of an employer, in the order those duties arise, and where state law adds more.
What the Act covers
A consumer report is information about a person's creditworthiness, character, general reputation, personal characteristics or mode of living, collected by a consumer reporting agency and used or expected to be used for an eligible purpose including employment. That definition is broad: a criminal search, a driving record, an employment verification and a credit report obtained through an agency are all consumer reports. A call you make yourself to a former employer is not, which is why the same information can sit inside or outside the Act depending on who gathered it.
The four duties on an employer
First, a clear and conspicuous written disclosure in a document consisting solely of that disclosure, before you order. Second, the applicant's written authorisation. Third, a certification to the agency that you have a permissible purpose, have made the disclosure, obtained authorisation and will not use the information in violation of equal opportunity law. Fourth, the adverse action process: before acting on a report, a pre-adverse action notice with a copy of the report and the Summary of Your Rights, a reasonable period to respond, and then a final adverse action notice identifying the agency and stating it did not make the decision.
State statutes go further, and California is the clearest
California's Investigative Consumer Reporting Agencies Act is a full state analogue with stricter rules, most notably a seven-year cap on reporting convictions with no salary exception, where the FCRA has no age limit on convictions at all. An ICRAA report is simply a report governed by that statute. Other states restrict employment credit checks to defined roles, including California, Illinois, Colorado, Connecticut, Hawaii, Maryland, Nevada, Oregon, Vermont and Washington, and several add their own notice requirements to the adverse action sequence.
When a check cannot be completed
An unperformable or uncompletable check is one where a search could not be run: a court is closed or its records are unavailable, an applicant's identifiers do not resolve, or a jurisdiction will not release data. It is not a finding about the applicant and should never be treated as one. The right response is to establish which specific element failed and why, and if you need that element, to find another route to it. Declining somebody because a court was inaccessible is a decision with no evidence behind it.
Questions people ask about what is fcra
What is the FCRA?
The federal Fair Credit Reporting Act, governing consumer reports. Despite the name it covers any report an outside agency assembles about a person for employment purposes, including criminal searches, driving records and verifications.
What does the FCRA require of employers?
A standalone written disclosure, written authorisation, a certification of permissible purpose to the agency, and the two-step adverse action process before and after any decision based on a report.
What is an ICRAA report?
A report governed by California's Investigative Consumer Reporting Agencies Act, the state analogue to the FCRA. It is stricter, notably capping conviction reporting at seven years with no salary exception.
What is an unperformable background check?
One where a search could not be run, because a court was inaccessible, records were unavailable or identifiers did not resolve. It is not a finding about the applicant and must not be treated as one.