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Is it legal

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Regular Contributor

Is it legal

For an employer to do a background/credit screening through a HP vs a SP in Florida? I am seriously pissed off right now.
Message 1 of 10
9 REPLIES 9
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Community Leader
Super Contributor

Re: Is it legal

It’s legal if you authorized the employer to do a credit check. Unfortunately, it’s a HP, unless FL has different laws. HPs are happening everywhere now—utility companies, to lease a cell phone, to get cable. Yes, it’s ridiculous, but it’s the world we live in now.

Of course, you could have denied having those two things done, but then it’s a double-edged sword.

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Message 2 of 10
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Regular Contributor

Re: Is it legal

Found out company was not suppose to do a credit check and are seeing about having it removed. Not the one who ran it, but the one I work for. One who ran it doesn't give a you know what. The approval was a long background check form with everything possible on it. Not signing for the criminal and such would have been a denial in employment and since this company bought the one I work for, losing my job I have been in and doing would be a negative. Just aggravated as I am in the middle of assuming a mortgage AND have 2 HP's on my file from last May and that is it. I didn't want any more, at least until the mortgage is done.
Message 3 of 10
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Legendary Contributor

Re: Is it legal

A credit report for employment purposes must be specifically authorized in writing by the consumer before it can be provided to any party, and the party requesting the report for employment purposes must include a certification within their inquiry request that the consumer has provided such written authorization.  See FCRA 604(b), subsections (1) and (2).

 

However, as for the issue of whether record of the inquiry can thereafter be included in credit reports provided to others (i.e., whether it can be considered a so-called hard inquiry), neither the FCRA nor any federal regulations make any such restrictions.

The ONLY type of inquiry that is specifically restricted under the FCRA as to being blocked from inclusion in subsequent credit reports provided to others (i.e., as a so-called soft inquiry) are the promotional inquiries under FCRA 604(c), wherein a creditor can obtain a listing of consumers who meet certain screening criteria in order to offer credit that has not been initiated by the consumer.

 

I am not aware of any state statutes or regs that legally mandate coding of employment-related inquiries as "soft."

Inquiries are not credit reporting matters, as they are not the furnishing of consumer information to a CRA, they are the opposite.

They are a request to see what others have reported.  As such, inquiries are not even covered under the standard credit reporting manual, the Credit Reporting Resource Guide.  CRA internal procedures remain unpulblished.

 

It is thus not a legal issue per se.

The CRAs have unofficial policies relating to certain types of credit inquiries that they routinely code as soft, such as those initiated by the consumer themselves for a copy of their own reports, and those by an existing creditor for internal account reviews.  Howver, those policies are not publicly available, are not included in their credit reporting manual, the Credit Reporting Resource Guide, and are not per se legal mandates. 

 

My understanding is that the CRAs do have an informal policy not to include inquiries that are solely for employment purposes, but that is not a legal mandate.

 

Message 4 of 10
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New Contributor

Re: Is it legal

I would consult with you're Department of Justice, and you're Department of Labor. My company did a soft pull on me a few months after hiring me. However, my job entitles me to top secret things so it is a disadvantage of working for a company like this. 

 

Do not let one Hard Pull make you feel bitter. While they do suck in the long run, its part of life. It takes 2 years to remove these. They are not on there forever? 

Message 5 of 10
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Established Contributor

Re: Is it legal


@RobertEG wrote:

A credit report for employment purposes must be specifically authorized in writing by the consumer before it can be provided to any party, and the party requesting the report for employment purposes must include a certification within their inquiry request that the consumer has provided such written authorization.  See FCRA 604(b), subsections (1) and (2).

 

However, as for the issue of whether record of the inquiry can thereafter be included in credit reports provided to others (i.e., whether it can be considered a so-called hard inquiry), neither the FCRA nor any federal regulations make any such restrictions.

The ONLY type of inquiry that is specifically restricted under the FCRA as to being blocked from inclusion in subsequent credit reports provided to others (i.e., as a so-called soft inquiry) are the promotional inquiries under FCRA 604(c), wherein a creditor can obtain a listing of consumers who meet certain screening criteria in order to offer credit that has not been initiated by the consumer.

 

I am not aware of any state statutes or regs that legally mandate coding of employment-related inquiries as "soft."

Inquiries are not credit reporting matters, as they are not the furnishing of consumer information to a CRA, they are the opposite.

They are a request to see what others have reported.  As such, inquiries are not even covered under the standard credit reporting manual, the Credit Reporting Resource Guide.  CRA internal procedures remain unpulblished.

 

It is thus not a legal issue per se.

The CRAs have unofficial policies relating to certain types of credit inquiries that they routinely code as soft, such as those initiated by the consumer themselves for a copy of their own reports, and those by an existing creditor for internal account reviews.  Howver, those policies are not publicly available, are not included in their credit reporting manual, the Credit Reporting Resource Guide, and are not per se legal mandates. 

 

My understanding is that the CRAs do have an informal policy not to include inquiries that are solely for employment purposes, but that is not a legal mandate.

 


Are states allowed to mandate that type of credit policy or does that fall under federal jurisdiction? I would love to see a proposition on the ballot here in NM/AZ that prevents employers, utilities, and landlords from asking/demanding hard pulls on credit reports. Soft pulls are sufficient for those entities. Im sure most consumers would support such a measure.











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Message 6 of 10
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Legendary Contributor

Re: Is it legal

States are permitted to enact their own credit reporting and debt collection statutes.

Many states have their own indidvidual verisons of the federal FCRA and/or FDCPA.

 

Federal law is preeminent, which means that states cannot enact statutory provisions that are contradictory to provisions of federal statute.

As for credit reporting, FCRA 625 provides a very detailed description of credit reporting provisions or requirments that may not be imposed under the laws of any state.

 

Unless explicitly exempted from state law under FCRA 625, a state can enact their own stututory provisions. 

A good example is the NYS statute that provided for a shorter exclusion period of 5 years for paid charge-offs and collections, as compared with the FCRA standard of no greater than 7 years.

However, no state could enact an exclusion period of, for example, 8 years, as that would contradict the max exclusion period under federal statute.

 

 

Message 7 of 10
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Regular Contributor

Re: Is it legal

New update: They labeled the HP a loan inquiry.

"A company has viewed a copy of your credit report as a result of a loan or credit application."

I am upset because I am in the middle of processing a mortgage and don't want anything to screw it up. That above has to have legal consequences.
Message 8 of 10
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Established Contributor

Re: Is it legal


@1984 wrote:
New update: They labeled the HP a loan inquiry.

"A company has viewed a copy of your credit report as a result of a loan or credit application."

I am upset because I am in the middle of processing a mortgage and don't want anything to screw it up. That above has to have legal consequences.

If they labeled it as such, that might be justification to dispute. 

Message 9 of 10
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Senior Contributor

Re: Is it legal


@800FICOGoal wrote:

@RobertEG wrote:

A credit report for employment purposes must be specifically authorized in writing by the consumer before it can be provided to any party, and the party requesting the report for employment purposes must include a certification within their inquiry request that the consumer has provided such written authorization.  See FCRA 604(b), subsections (1) and (2).

 

However, as for the issue of whether record of the inquiry can thereafter be included in credit reports provided to others (i.e., whether it can be considered a so-called hard inquiry), neither the FCRA nor any federal regulations make any such restrictions.

The ONLY type of inquiry that is specifically restricted under the FCRA as to being blocked from inclusion in subsequent credit reports provided to others (i.e., as a so-called soft inquiry) are the promotional inquiries under FCRA 604(c), wherein a creditor can obtain a listing of consumers who meet certain screening criteria in order to offer credit that has not been initiated by the consumer.

 

I am not aware of any state statutes or regs that legally mandate coding of employment-related inquiries as "soft."

Inquiries are not credit reporting matters, as they are not the furnishing of consumer information to a CRA, they are the opposite.

They are a request to see what others have reported.  As such, inquiries are not even covered under the standard credit reporting manual, the Credit Reporting Resource Guide.  CRA internal procedures remain unpulblished.

 

It is thus not a legal issue per se.

The CRAs have unofficial policies relating to certain types of credit inquiries that they routinely code as soft, such as those initiated by the consumer themselves for a copy of their own reports, and those by an existing creditor for internal account reviews.  Howver, those policies are not publicly available, are not included in their credit reporting manual, the Credit Reporting Resource Guide, and are not per se legal mandates. 

 

My understanding is that the CRAs do have an informal policy not to include inquiries that are solely for employment purposes, but that is not a legal mandate.

 


Are states allowed to mandate that type of credit policy or does that fall under federal jurisdiction? I would love to see a proposition on the ballot here in NM/AZ that prevents employers, utilities, and landlords from asking/demanding hard pulls on credit reports. Soft pulls are sufficient for those entities. Im sure most consumers would support such a measure.


Utilities are in fact extending you credit so there is no reason that should not be a HP if thats what the utility want to do.  Rent is usually paid in advance so tenichnally not an extension of credit.  However lots of people don't pay on time and the landlord has to attempt to collect just like any other debt so again I don't see a problem with that. 


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