What is the Consumer Credit Reporting Reform Act (CCRRA)?

The Consumer Credit Reporting Reform Act (CCRRA) is a U.S. federal law enacted in 1996 which enables consumers to contest erroneous credit reports.

The CCRRA also imposes obligations on employers who use credit reports when evaluating job applicants or employees. Before obtaining a credit report of a criminal background check on an applicant or employee, an employer must notify the applicant or employee in writing and secure written consent to do so.

If an employer obtains and uses an “investigative consumer report”, which is obtained through personal interviews and bears on the character or mode of living of an applicant or employee, the employer must give timely written notice.

If, based on a third party credit agency report, an employer wishes to take adverse action, such as terminating employment, not hiring an applicant or not promoting and employee, then prior to taking action, the employer must give to the applicant or employee a copy of the report and a notice of consumer rights, including the right to challenge the report.

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