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Can a Prospective Employer Use My Credit Report Against Me?


Your credit report can affect more than your ability to get a loan. It can also prevent you from getting a job. Prospective employers often use credit or “consumer reports” when making hiring decisions. While this is a legal practice, employers must strictly comply with the federal Fair Credit Reporting Act (FCRA) before obtaining such information.

Among other things, the FCRA requires the employer to give you stand-alone notice of its intention to use information in your credit report. This notice must be separate from any job application. The employer must also obtain your written permission. And before taking any “adverse action”–e.g., withdrawing a conditional job offer based on your credit information–the employer must give you a copy of the report and a “description in writing” of your rights under the FCRA.

Judge Dismisses Part of FCRA Class Action Due to Lack of “Legal Injury”

What happens if an employer does not give you this information? A recent decision from a federal judge here in Philadelphia, Davis v. C&D Security Management, Inc., addressed this precise question. The plaintiff in this unsuccessfully applied for a job with the defendant. She alleged the defendant refused to hire her based on information on her credit report–yet she never received a copy of the report or a written description of her rights under the FCRA. In addition to seeking damages for herself, the plaintiff also requested certification of a class action on behalf of any other person similarly affected by these alleged violations of the FCRA.

The judge overseeing the case, however, granted the defendant’s motion to dismiss the case with respect to the issue of failing to provide a written description of the plaintiff’s rights under the FCRA. The judge held the plaintiff lacked standing to bring this claim on behalf of herself or anyone else. Even if the defendant failed to provide the required notice of rights, the judge said the plaintiff suffered no legal “injury.”

Essentially, the purpose of the notice is to inform a job applicant of their right to take legal action under the FCRA. Since the plaintiff filed a timely lawsuit, the judge found she was clearly aware of her rights. The defendant’s “bare procedural violation” was therefore not enough to support the plaintiff’s lawsuit on this issue.

That said, the judge did not address the other aspect of the plaintiff’s case, namely the defendant’s alleged failure to provide the plaintiff (or others like her) a copy of her credit report. This issue was not addressed in the defense’s motion to dismiss. Nor did the judge grant the defense’s request to strike the plaintiff’s allegations on behalf of the entire class, at least at this time.

Speak with a Philadelphia Consumer Rights Attorney Today

The FCRA is designed to protect individuals from the misuse of their consumer information–as well as help people address inaccurate information on their credit reports. If you need advice or representation in connection with an FCRA matter from an experienced Philadelphia consumer lawyer, contact Louis S. Schwartz at CONSUMERLAWPA.com today to schedule a consultation.





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