issues

Credit Reporting & Background Checks

If you were denied a job or housing because of inaccurate, outdated, or incomplete information in your credit report or background check, your legal rights may have been violated. As a leader in challenging this type of unfair practice, we’ve helped people across the country challenge unfair barriers caused by background checks.

Companies known as consumer reporting agencies (CRAs) assemble information about your credit history and background. When they get it wrong, people can lose out on jobs, housing, loans, and other opportunities.

 

CRAs include major credit bureaus as well as companies that provide employment, tenant, and criminal background screening services. They are supposed to ensure that the information they provide is accurate, up to date, and used only for legally permitted purposes.

Consumer reports can contain errors, outdated information, or criminal records that have been sealed. They might reflect circumstances beyond your control, like medical debt, divorce, or job loss. You’re supposed to get a copy of the same report they produced about you, but they often don’t carry out these vital steps.

In the end, a mistake could cost you an opportunity you deserved because you didn’t get to contest inaccuracies in your report.

We work to protect your rights and ensure your data is used only as the law allows, giving you the chance to correct mistakes. Our goal is for you to have confidence that every decision made about you is fair and grounded in accurate information.

A Background Check Shouldn’t Decide Your Future

The Fair Credit Reporting Act (FCRA) is an important federal law that gives you background check rights. Although the law’s name suggests a focus on credit checks, the truth is it covers many types of reports often used in a background check, such as:

  • Criminal records
  • Driving records
  • Credit report
  • Employment history

Getting a copy of your credit report is vital because it could have mistakes that you don’t even know are there. It might say you missed a credit card payment or list a loan you paid off. Your report might have entries that belong to someone with a similar name or Social Security number. It could include old information that, by law, is not supposed to appear in a consumer report.

One surprisingly common problem is called an OFAC alert, which may be triggered by a false positive when your name matches someone on a government sanctions list. OFAC is the acronym for the U.S. Office of Foreign Assets Control, which enforces sanctions.

Several states have also passed laws governing credit and background checks. These laws provide powerful tools for protecting your rights.

Credit Checks Can Reinforce Inequality

In addition to the rules governing how consumer reports are shared and corrected, civil rights laws also come into play. Credit scores and background information often reflect systemic disparities that disproportionately harm communities of color, making civil rights protections essential when employers rely on this data to make decisions.

Inequalities in lending, income, and wealth mean there are often racial disparities in credit scores, disproportionately harming Black and Latino workers. Credit history discrimination can reinforce these gaps.

Consumer reports that include public records—like bankruptcies, liens, or judgments—often contain errors, especially for people who’ve had limited access to legal help to contest them.

Basing important decisions on someone’s credit history can eliminate qualified candidates and continue the cycle of discrimination.

Standing Up for Fairness

We represent consumers, borrowers, renters, workers, and anyone who has been harmed by unfair practices in credit reporting and background checks. You deserve a fair chance and we’re here to help.

Framing the Issue

  • Employers tend to assume a higher credit score indicates you’re responsible or trustworthy. The truth is, there is no link between credit score and your job performance. 
  • Research suggests that low-wage workers with imperfect credit scores are among those who may be harmed by preemployment credit checks. 
  • Mistakes on credit reports are surprisingly common. In one study of 4,300 people by Consumer Reports, more than one quarter of the participants found mistakes that were serious enough to affect their creditworthiness.   
  • For many Americans, routine financial challenges lead to lower credit scores, which ultimately can impact their employment prospects.  
  • A sudden illness or injury can lead to huge financial strain. Medical debt burdens millions of Americans, yet employers routinely make decisions about wide swaths of job applicants based solely on their credit report. 

Notable Matters

  • Represented job applicants who challenged a bank’s use of credit history in making hiring decisions.
  • Negotiated a class action settlement over $2.5 million for job applicants whose background check reports illegally contained old convictions that state law required the consumer reporting agency to remove. The case included two wins at the California Court of Appeal on the scope of the state’s Investigative Consumer Reporting Agencies Act that confirmed it was not preempted by federal law.
  • Secured a $1.15 million class action settlement under the Fair Credit Reporting Act (FCRA) for employees and job applicants who were fired or not hired based on their background checks, but the employer didn’t give them copies of the reports so they could check for mistakes.
  • Settled for nearly $1 million in a class action under the FCRA for employees and job applicants who were fired or denied employment after background checks, but didn’t get to see or respond to the reports. 

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Were you denied a job after an employer ran a credit check?

If you’ve been treated unfairly because of something in your background check, we’re ready to stand up for your rights.

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