CAUTION:
The federal Fair Credit Reporting Act (FCRA) extends to employers whenever an "investigative consumer report" is used for employment purposes. These reports include information on a consumer's character and personal characteristics through personal interviews with neighbors or associates of the consumer. The FCRA provides that before an employer may obtain this report - or request one to be prepared - on any applicant, the employer must: (1) provide that person with a clear and conspicuous disclosure in a document that consists solely of a statement that such a report may be obtained for employment purposes; and (2) obtain the applicant's written authorization to request the report.

Prospective employers should proceed with caution in asking applicants to authorize them to obtain a credit report in connection with an employment application. Absent a strong and compelling business reason to do so, questions on credit worthiness should not be included on an employment application. The EEOC and some courts have concluded that an employer's consideration of credit references, not unlike reliance on arrest and garnishment records, violates Title VII of the Civil Rights Act of 1964 where there is no showing of job relatedness or business necessity or where the practice of considering credit references results in disqualification of a disproportionate number of minority applicants.