You’ve probably read or heard the term “consumer report” when talking about background checks. So, what is the difference between these two terms? Are they the same? Keep reading to learn more about background checks.
Background Check vs Consumer Report: What Is the Difference?
Background checks and consumer reports are the same. The reason is that background checks are considered consumer reports under the Fair Credit Reporting Act (FCRA).
The FCRA defines consumer report as follows:
“Any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for:
(A) credit or insurance to be used primarily for personal, family, or household purposes;
(B) employment purposes; or
(C) any other purpose authorized under section 604”
Simply put, the term “Consumer report” is just another, less common way to refer to a background check.
As we have seen in previous posts, background checks/consumer reports can include a variety of information from different sources, including credit reports and criminal records at the county, state, or federal level.
Companies that provide employment background checks qualify as consumer reporting agencies. Any company that uses background checks to make hiring decisions must comply with FCRA, along with any other applicable local legislation.
Why Are Background Checks Important?
We are living in an information age, so background checks are an essential part of today’s hiring process. They provide employers with vital information about potential employees, such as skills and qualifications, prior work experience, criminal records and more.
Background checks help employers make more informed decisions while assessing applicants, ensuring that they hire the correct person for the job. With background checks, companies can not only give their employees the best opportunity to be successful in the role but also protect their organization from any potential risks associated with bringing on a new employee.
Simply put, background checks have become an invaluable resource for employers across a wide range of industries, including:
- Food service
Plexus Global: Background Screening Services in California and Beyond
Plexus Global is a California-based background screening company serving organizations all over the U.S. and abroad.