FCRA Background Check: Everything You Need to Know
Cindy Ellis - June 3, 2025
Background checks are an important part of the hiring process because they determine if an applicant is suitable for a role or not. Most companies have guidelines they follow to ensure that employees meet specific standards, and this also applies to government agencies and other situations where background checks are necessary.
While every company will have unique practices for running background checks, they all have to meet and follow FCRA guidelines. These are guidelines that ensure that the background check process is fair for everyone and that information isn’t used in the wrong ways to prevent someone from being hired.
Therefore, an FCRA background check that complies with state and federal law is important to run, and whether you don’t know where to start or want to add some more guidelines to your process, we’re here to help. Read on to learn everything you need to know about FCRA background checks.
What Is the Fair Credit Reporting Act (FCRA)?
Before we dive into the details of an FCRA background check, it’s important to understand what the FCRA is and what it represents. First and foremost, FCRA stands for the Fair Credit Reporting Act. This act became a law in 1971 and was written to ensure that reporting agencies act fairly. With the rapid rise of information availability during the 1970s and 1980s, the act is relevant to protect people’s information.
In the past, the FCRA mainly focused on credit reporting because it became a common factor for gaining loans or new credit lines. However, the FCRA encompasses more than just credit checks. Today, the FCRA covers information about someone’s background or character, information that impacts someone’s reputation, criminal records, and much more.
While this information is publicly available with or without the FCRA being in place, you can’t use this information for employment purposes without consent. What’s more, the FCRA limits what you can use.
Consumer Rights Outlined by the FCRA
Consumers and applicants for employment roles enjoy the protections outlined in the FCRA. For example, the law dictates how far back a background check will go. A great example of this is how bankruptcy can’t be used against someone if it’s older than seven to ten years – this can vary based on the state.
That said, this is only the start of the protections that are available within the FCRA. Other protections include:
- The right for employees to be told about background checks before they happen through informed consent
- Employees have the right to review background check findings for any discrepancies
- The right to be told when information leads to a hiring decision
- Employees have the right to appeal information found in background checks that are
For these reasons, it’s important to understand the rights of applicants and employers during the background check process. Doing so will prevent you from getting into any trouble.
How to Conduct an FCRA-Compliant Background Check
When you run a background check on an employee, you need to run an FCRA-compliant background check. This means that you need to follow all rules and guidelines outlined by the FCRA when running a background check to avoid legal problems and liabilities. It’s important for both employees and employees to know these rules and steps.
Fortunately, this is easy to do when you work with a reputable tool like the background check tool we offer through Information.com. Learn about the steps you can take to run an FCRA background check below.
1. Provide Full Disclosure About the Background Check
When you want to run a background check on someone, it’s important to provide full disclosure before you begin the process. This notice needs to be written because the FCRA requires written authorization before allowing you to go through the background check process.
While you can change the verbiage and design of the document, it does need to be a standalone document and not just a part of the hiring packet you give to new employees. You also need to include documentation about any additional searches you’ll be running. For example, if you need to check with someone’s references, you’ll have to notify them in the document as well.
This also applies to drug screenings and other things you’ll be checking for during the pre-hiring screening process. At the end of the day, you want to make sure applicants are ready for anything.
2. Obtain Written Consent for the Background Check
Once the applicant has read over the documents and signed them, you have consented to run the background check. You can’t begin the process without this consent, even if the employee verbally agrees to the terms of the check. This written consent acts as confirmation that the background check is ready to be completed.
Failing to get consent will reset the background check not being valid. In fact, your business may be liable for lawsuits, fines, and other penalties.
3. Notify the Background Check Service that You Have Consent
The next step is to notify the service that you’re working with that you have consented to run the background check. Without this written confirmation, firms won’t run background checks on any applicants.
Essentially, it acts as insurance for the companies running the check to prevent any issues on their end. This is a simple form you can fill out, and you can even photocopy the form that an applicant filled out if that helps.
4. Provide the Applicant with a Summary of Their Rights Under the FCRA
Aside from having consent from the applicant, you also need to provide them with their rights under the Fair Credit Reporting Act. This helps applicants understand what the process entails and why they might be rejected for employment. Along with this summary, you also need to provide the applicant with a pre-adverse action notice.
The pre-adverse action notice will detail everything that’s being done during the background check process.
5. Run a Background Check on the Applicant
The next step is to begin the background check process. This can be done using any of our people search tools if you are conducting a background check for personal purposes, or you can choose to work with a specific background check company to screen potential employees.
Regardless of how you want to do so, you’ll have to begin the process and run the background check, so we’ll use our background check tool as an example to outline what that process will look like.
To run a background check with Information.com, follow the steps below.
- Enter someone’s first and last name, city, and state into the search tool
- Select Search
- Find the person you’re looking for and select them. You might have to provide additional details to refine the results
- Consent to the terms and conditions
- Open the full report
Once you open the full report, you can view anything that’s on the public record. This includes the name of the person, their criminal records, education history, civil court records, and much more.
While we outlined what the background check process looks like for Information.com, it might be different for other organizations. However, the information you need to provide should remain consistent across the board.
6. Provide the Applicant with a Final Notice
When you run a background check on applicants, you need to view the results and make a hiring decision based on them; you are also required to provide applicants with a copy of their report You must include their name and phone number in this documentation, along with other details about the organization that ran the background check.
Of course, if you are planning on not hiring an individual based on their background check, the final notice of adverse action should include the reason they weren’t hired. Doing this gives an applicant the opportunity to review the information on their background check report and dispute any errors. Applicants tend to have 60 days to go through this process.
It’s also important to note that final adverse action notices, or any notices for that matter, may vary based on the state. Always check with your local and state laws to ensure you find what you’re looking for.
Run an FCRA Compliant Background Check Today!
FCRA guidelines aren’t made for fun. In order to hire employees correctly, you need to ensure that your background check process is FCRA compliant. Failing to do so can result in fines, penalties, and other liabilities that extend beyond just your finances. For these reasons, we always recommend working with a reputable background check provider.
That said, you have plenty of options to choose from when running a background check report, and it’s not hard to remain FCRA compliant if you follow the guidelines we covered in this article. Always make sure you’re mindful of consent, following state laws, and explaining as much as possible to applicants to avoid any problems.
