Please note that the below glossary terms are defined in such a way that allows discourse to parallel any Consumer Report for the purpose of employment and background checking.

– Fair Credit Reporting Act / FCRA:

Federal law that administers the collection, distribution, and managing of any candidate information which includes all credit information.

  • Adverse Action:
    • (regarding employment): This action is a two step process that an employer must take whenever the employer makes a decision to hire a candidate based entirely, or partly, on any information that was received from a screening report:
      • Step 1 / Pre-Adverse Action: This process occurs before the actual adverse action that is mentioned above is implemented: An employer must provide the candidate with a complete copy of the Consumer Report, the Consumer Financial Protection Bureau / CFPB which is “A Summary of Your Rights Under the FCRA,” and lastly supply the candidate to dispute against any information that was gathered on their report that appears to be false. A note for the candidate: Always be prepared to supply proof if you are going to refute any false information.
      • Step 2 / Final Adverse Action: An employers duty to inform the candidate that adverse action is in place: The employer must explain fully with reason whether or not the candidate is going to be hired, promoted, etc.
        (regarding tenancy): This action is a one step process in which the candidate is informed that adverse action is being executed.
  • Authorization & Disclosure: Prior to any employer, landlord, etc. issuing a screening check they must receive granted permission from the candidate to do so. The disclosure half of this discourse defines that the customer notifies the candidate in writing, while the candidate grants such permission- the authorization aspect of this discourse. Authorization and Disclosure forms can also be regarded as consent forms or release forms.
  • Consumer: The individual whom is the muse for issuing a background check.
  • Consumer Report: Any sort of document or report that is made up of the below information regarding the consumer that is being screened:
    • Credit standing, history, & capacity
    • Personal characteristics
    • Overall reputation
    • Mode of living
      Through standard procedure, the information regarding the above aspects are retrieved from verification of employment, references, education, licensure, criminal, motor vehicle, and credit report consolidation. Consumer Reports are typically regarded as Background Investigations, Background Checks, and Screening reports and are established by a third party through which employers, landlords, etc. choose when need be.
  • Investigative Consumer Report: Such reports are embodied with interviews with the consumer’s friends, neighbors, associates and / or former employers.
    • *** Upon State Regulations, the state of California considers all Consumer Reports “investigative Consumer Reports.” The only exception to this rule are stand-alone credit reports.
  • Consumer Financial Protection Bureau / CFPB: This bureau is regarded as an agency that is responsible for managing all financial aspects that are offered to the consumer. This agency collaborates with the Federal Trade Commission with aim to inform consumers on all financial services that are available for use.
  • Consumer Reporting Agency / CRA: This is the business that gathers all information on the candidate that is being screened by request of a third party- an employer, landlord, etc. These businesses are given specific information about the candidate and are expected to use such information to provide the third party with a background check report.
    • CRA’s are typically known as Background Screening Companies
  • Credit Report: This report includes all information regarding a candidate’s credit history, but is not limited too other anchors such as payment history, liens, charge-offs, bankruptcies and any additional outstanding financial billing.
  • Dispute: This defines the customer’s right to refute any false information that appears on their report. It is required by the FCRA that reporting agencies reinvestigate to confirm and change any false information that was claimed within 30 days.
  • End-User: An agency / individual that requests a Consumer report.
  • Federal Trade Commission / FTC: A federal agency that protects consumers by stopping any fraudulent practices that are exercised for a background check.
  • Permissible Purpose: the FCRA’s deemed right for an end-user to receive a copy of a consumer report.
  • Summary of Rights: A document that is established by the Consumer Financial Protection Bureau that is used as a material for peoples to state their rights in regards to any Consumer Report that is being issued. This document must always be present when a person is provided with a copy of such a report.
    • Official name of this document: “A Summary of Your Rights under the Fair Credit Reporting Act.”