Employment Reports or Specialty Consumer Reports

When you apply for a job, your prospective employer will give you an authorization form that you have to sign permitting him to conduct a background check on him. The check will include a review of your credit report, education, employment record, references, judgments, liens and social security number et al.

Employers hire firms to conduct background screening on applicants. These firms collect the credit reports from the credit bureaus and conduct the verification. To be fair to the employers, the report does not discriminate on the basis of age. They get your written permission to conduct a background check only.

However, it was found that very few employers conduct credit checks. If the employer denies employment to you on the basis of the check, he will have to send you an adverse action notice, using which you can request for your free credit report. The notice will cite reasons from your report that were instrumental in your being denied employment.

New regulations regarding employment are now in place and to avoid the injustice to applicants, four states have passed legislations that details how a credit can be used and if it can be used for employment or not. Keeping the recent recession in mind, more states are considering doing the same.