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FCRA Overview

This overview of the Fair Credit Reporting Act (15 U.S.C. § 1681) (FCRA) addresses requirements related to the employment background screening process and is provided only as general guidance for First Advantage customers. It is neither intended as legal advice nor as the sole educational tool for an employer’s staff with respect to their legal obligations around a compliant background screening program. The employer retains the responsibility to understand and educate its staff on the FCRA and the screening process. Because the information contained herein is general and is neither complete nor necessarily applicable to any specific set of facts or circumstances, please consult legal counsel for further guidance. 

For a complete copy of the FCRA visit the Consumer Finance Protection Bureau (CFPB) at: For helpful information related to employment screening and the FCRA, visit the Federal Trade Commission’s (FTC) at

The FCRA was enacted to protect consumers in the consumer reporting process by regulating the report, the consumer reporting agency that provides the consumer report, and the employers/ end-users of the consumer reports. The FCRA requires employers to follow certain procedures when it uses a consumer reporting agency to obtain a consumer report. Such procedures can be divided into two categories: Report Ordering Procedures that employers must follow before ordering a consumer report, and Adverse Action Procedures that employers must follow if they intend to use any information, in whole or in part, from the consumer report to take an adverse action.


Although not required by the FCRA, it is a recommended practice to have the applicant show a form of picture identification to help verify his/her identity. This is especially important in some states such as California, Oklahoma or Minnesota where an applicant can elect to receive a copy of the consumer report during the consent process. The employer must take the following steps BEFORE ordering a consumer report from First Advantage:

Specifically certify to First Advantage that it will: (i) provide a written disclosure and obtain a written authorization from the applicant; (ii) comply with the pre-adverse and adverse action procedures; and (iii) not use the consumer report in violation of any federal or state equal employment opportunity law or regulation. 

Provide a clear and conspicuous disclosure in writing to the applicant in a document that consists solely of the disclosure, stating that a consumer report may be obtained for employment purposes. This disclosure must be in a separate document and cannot contain any additional information except for the consumer’s authorization. The disclosure should not be made a part of any other form, including the employment application. 

Obtain written authorization from the applicant.  According to a FTC Advisory Opinion letter, the authorization may be included in the same document as the disclosure.*  However, some employers may choose to separately present the disclosure and authorization to the applicant so that the disclosure is presented in a document that consists solely of the disclosure. 

We provide the following templates for instructional purposes.  They are not intended as legal advice and we recommend you consult with an attorney to review these documents for legal sufficiency to ensure your compliance with the FCRA. 


Not only does the denial of employment fall under the FCRA’s definition of “adverse action”, but so do any other decision(s) for employment purposes that adversely impacts any current or prospective employee *. 

If information in the consumer report will be used, in whole or in part, to negatively impact the employment opportunities of the applicant or employee, the employer must provide all of the following BEFORE taking an “adverse action:”

  • A pre-adverse action notice;
  • A copy of the consumer report; and
  • A copy of the CFPB issued notice, A Summary of Your Rights Under the Fair Credit Reporting Act.

The pre-adverse action process affords the applicant the opportunity to dispute information in the consumer report which may be inaccurate or incomplete. The employer should allow a reasonable amount of time for the applicant to review and respond to the pre-adverse action notice before any final determination is made or adverse action is taken. (There is an FTC Advisory Opinion letter that indicates  that a period of 5 business days is reasonable, but this time period will depend upon the facts of any particular employment situation as to whether the applicant has a reasonable opportunity to dispute any information that may be incorrect or incomplete in the consumer report.*) 

If the applicant does not dispute the information in the consumer report after an employer follows the above described pre-adverse action process, and a reasonable period of time has elapsed, the employer may then take an adverse action (such as not hiring the applicant) by providing the following in writing, orally or electronically (First Advantage recommends written documentation)*: 

A notice to the applicant of the adverse action which includes at a minimum the following information:*

  • The name, address and telephone number of the consumer reporting agency that furnished the consumer report to the employer;
  • A statement that “the consumer reporting agency did not make the decision to take the adverse action and is unable to provide the applicant the specific reasons why the adverse action was taken”; and,
  • A notice of the applicant’s right to obtain within sixty (60) days a free copy of the consumer report from the consumer reporting agency and to dispute the accuracy or completeness of any information in a consumer report. 

The FCRA allows for non-written authorization in certain circumstances if employment will be in the trucking industry.* 

Please be aware that some states have requirements in addition to the FCRA that must be complied with as well. For example, in California, Minnesota and Oklahoma, the applicant must be provided a written disclosure notice with a box that allows the applicant to “check the box” to receive a copy of the consumer report.* 

*Please consult legal counsel for what methods are best for your business operations and how to comply with legal requirements.

More on the FCRA Below!
The FCRA is the most significant federal statute guiding employment screening. As a courtesy to our clients and visitors, First Advantage provides an overview of the FCRA to address the requirements related to the employment background screening process. This synopsis is provided strictly as guidance and is not intended as legal advice nor should it be relied upon as the sole educational tool for the employer’s staff. Please consult your legal counsel for specific guidance in setting up and maintaining a legally compliant background screening program. Employers retain the responsibility to understand the FCRA and educate their staff involved in the screening process.

Download our FCRA Information Packet

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