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For various reasons, I avoid job applications which require a credit check. I filled out a job application (in the state of Texas) today with this language.

How do you interpret this? Does it imply either that a credit check is required -- or that my agreeing to these terms also gives my consent to a credit check? Or does it mean that the company will notify me and ask my permission in advance before it does one? I have seen lots of job applications with similar fuzzy language like this and can't figure out what it really means.

Consent to Disclosure of Information. I hereby grant permission to (Company X) to investigate my previous employment, educational background, criminal background and character references. I acknowledge and understand that I have hereby received notice in compliance with applicable laws that (Company X) may seek to procure information regarding my character, general reputation, personal characteristics or mode of living from a consumer reporting agency. I understand that upon my written request, (Company X) shall make a complete and accurate disclosure of the nature and scope of such investigation if one is made. I hereby release (Company X) from liability (including liability for negligence) arising from reference and background checks.

EDIT: Is it possible that state or federal law requires a separate authorization to be made to consent to a credit check? Is it more common for HR departments to seek a separate authorization for a credit check from applicants or not to seek it? (ps, this is for a larger company).

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    VTC why didn't you just ask them about the credit check? – bharal Aug 13 '18 at 21:30
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    I am in the application stage. In my experience, HR typically ignores inquiries from job seekers, and if they answer they will speak only in generalities. As an aside, I can't tell me how many times the job application software goofs and I try to contact HR to see if my application was actually processed. I have almost never received a reply. – idiotprogrammer Aug 13 '18 at 21:34
  • I am flabbergasted that "a consumer reporting agency" has information "regarding my character, general reputation, personal characteristics or mode of living". – Mawg Aug 15 '18 at 7:17
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How do you interpret this? Does it imply either that a credit check is required -- or that my agreeing to these terms also gives my consent to a credit check? Or does it mean that the company will notify me and ask my permission in advance before it does one?

I believe signing this would give your consent to a credit check.

The company may or may not pay to have one run. If they do, you can provide a written request and get a copy of the findings.

Is it possible that state or federal law requires a separate authorization to be made to consent to a credit check?

It's possible. Depending on local laws, this Consent to Disclosure may or may not allow the background check to include a credit check.

There is no federal law that requires separate consent. But though unlikely, local laws might.

If you need to know specifically, you could ask the company, or check your local laws.

Is it more common for HR departments to seek a separate authorization for a credit check from applicants or not to seek it?

No. In my experience, in my locale, a comprehensive Consent document like this allows the background check to include a credit check as well.

Your local laws and customs may differ.

Here's some information I found about Texas. I'm sure more information can be found:

https://www.blr.com/HR-Employment/Staffing-Training-/Background-Checks-in-Texas

"In addition to the FCRA, Texas employers should be aware that there is a state law regulating consumer reporting agencies. The state law permits employers to obtain consumer reports for employment purposes. However, unless the employee or prospective employee will be making more than $75,000 per year, information contained in the consumer report generally may not date back more than 7 years from the date of the report. This includes information regarding arrests, indictments, and convictions of crimes. In addition, a consumer report obtained for employment purposes may not include medical information (TX Bus. Code Sec. 20.05)."

BTW, in my experience larger companies are far more likely to run a pre-employment credit check. If you have credit history problems you might want to target smaller companies, perhaps even startups.

  • Thanks, but how depressing. So this boilerplate language allows an employer to use possibly inaccurate information to discriminate without any empirically valid justification and with the guarantee that you have indemnified them from damages ... why would any job seeker agree to that? – idiotprogrammer Aug 14 '18 at 3:06
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Yes, you're allowing the company to do a credit check on you (a "consumer reporting agency" is a credit bureau). And the company is allowing you to get a report of what that credit check returns if you provide a written request. I suppose it is possible that some state or local law requires that the authorization for a credit check be separate from the authorization for a criminal background check or for a reference check though that isn't the normal case. It's perfectly normal for HR to have a single general bit of verbiage for all the elements of a background check they might perform.

Of course, just because you've authorized a credit check does not imply that the company actually will do a credit check. They might just check other aspects of your background.

It's generally easier for HR to have a single bit of boilerplate language that covers every eventuality and then to figure out based on the actual risks what sort of background checks to run than it is to have dozens of different applications for different positions that call out what sorts of background checks they do. A company might, for example, do a criminal background check on everyone, check the driving record for technicians that drive to customer sites, do a credit check on anyone in IT or accounting, and do a reference check only on executives. Having separate application forms for IT technicians that drive to clients vs. IT folks that don't use a company car vs. IT executives (along with all the other permutations) would generally be a major pain. Much easier to have everyone sign off on the general case and then decide later what to run.

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    Maybe I missed some key word, but I don't read "credit check", or even "credit" on that document... mind illustrating me how you arrived to that interpretation? – DarkCygnus Aug 13 '18 at 21:05
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    @DarkCygnus Consumer Reporting Agency is just a fancy name for companies that track credit history. The three largest ones are Equifax, Experian, and Transunion. – AffableAmbler Aug 13 '18 at 21:08
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    (Company X) may seek to procure information regarding my character, general reputation, personal characteristics or mode of living from a consumer reporting agency. This line would do it. – C Henry Aug 13 '18 at 21:08
  • maybe my real question is whether labor law in my state requires a separate authorization to run a credit check. – idiotprogrammer Aug 13 '18 at 21:17
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    @gnasher729 - The credit bureau doesn't have a separate form for you to sign. If a company pulls a credit report without authorization, your recourse is with that company not the credit bureau. The credit bureau will likely revoke the company's access if it is common thing. – Justin Cave Aug 13 '18 at 22:28

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