Under the Fair Credit Reporting Act (FCRA), a background checking report is a consumer report when it serves as a factor in determining a person’s eligibility for employment, credit, insurance, housing, or other permissible purposes and includes information “bearing on a consumer’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living.” In other words, all companies that sell or provide consumer reports are “consumer reporting agencies” (CRAs) under the FCRA. The law requires such entities to follow reasonable procedures to assure accuracy, get certifications from clients and provide clients with information about the FCRA. Under the FCRA, however, a CRA may not report records of arrests that did not result in the entry of a judgment or convictions, where the arrests occurred more than seven years ago.
