Keys to FCRA Compliance

The Fair Credit and Reporting Act was enacted to protect consumer and employment candidates from unfair hiring decisions. To that end, when a background check uncovers information that causes you to consider making an adverse employment decision, the FCRA outlines specific actions that must take place. Following these dos and don’ts will ensure FCRA compliant background checks:




  • Initiate both pre-adverse and adverse action notices

Once you receive a background check report that causes you to reconsider a hiring decision, the adverse action process begins. This decision triggers the need for a pre-adverse action notice to be provided. Once this notice is received, the applicant has a set period of time to respond with explanations, refutations, or corrections. Following this process, if it is still your decision to make an adverse hiring decision, the adverse action notification must be issued.


  • Provide complete information.

Pre-adverse action notifications must provide the candidate with complete information. This allows the individual to understand exactly what disqualifying information was uncovered, why the information is disqualifying, and what, if anything, they can do about it.


  • Make certain you provide all applicable city, state, and federal notices.

Be careful to ascertain the disclosure and notification requirements for your specific area and make sure your hiring procedures are in compliance. One example included Ban the Box laws, which can differ between jurisdictions.


  • Give plenty of time to the candidate for disputes or explanations.

Disputing erroneous information on a background check takes time. To be fair, you need to provide a meaningful resolution time, typically 5-10 business days.


  • Take an individual approach to assessments.

The aim of the FCRA is ultimately to make certain that all people are treated fairly. To accomplish this, it’s necessary to only exclude individuals for reasons that are relevant to the position and for legitimate business purposes.




  • Consolidate information or notices.

The FCRA rules are very specific about method and content. Be careful about the details, and don’t attempt to circumvent or shorten the process.


  • Fail to provide information to the applicant about their rights.

Make certain to provide applicants with all the required information, including where you got the background information and what they can do to dispute the report.


  • Rely on verbal information.

Every step of the background check and adverse action process must be documented in writing. Spoken conversations are useless in a dispute.


  • Take an adverse action before the process is fully complete.

Keep the job open and continue communicating with the applicant until you’ve seen the entire adverse action through. The process is designed to give space for mitigating information to come to light; give the process time to work.


The adverse action process outlines by the FCRA is good for both sides. It gives candidates a fair shot at employment opportunities and gives your organization access to a wider pool of talent. The best person for the job might have a blemish on their record; the FCRA makes it possible to address that in the best possible way.

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