Frozen Credit Thawed for Background Investigations
Some good news on the credit check front. An important amendment to the Fair Credit Reporting Act (FCRA) went into effect on September 21, 2018. Two key points to note:
- Credit bureaus can no longer charge individuals a fee for freezing their credit records
- Individuals no longer have to un-freeze their records in order to accommodate a credit check as part of a background investigation
Many individuals have frozen their credit records to protect them from unwanted or illegal access. Until now, applicants for Federal, military, or contractor employment who had frozen their records have been required to unfreeze those records prior to the initiation of a background investigation by an Investigation Service Provider (ISP) such as the National Background Investigations Bureau (NBIB). This requirement ended Friday, September 21 when an amendment to the Fair Credit Reporting Act (FCRA) went into effect.
The amendment, known as the Economic Growth, Regulatory Relief, and Consumer Protection Act was signed May 24, 2018 and provides access to free credit freezes for all consumers, while also providing new specific exceptions for the release of a frozen credit report. The new exceptions most notably include, but are not limited to, “any person using the information for employment, tenant, or background screening purposes.” Subjects of a personnel background investigation, who in the past had to pay to unfreeze their credit for their background investigation to be completed, will no longer need to take the time and expense to unfreeze their credit.
The credit check is a critical element in an investigation and could direct other investigative leads. In the past, a frozen credit report caused delays and could even prevent NBIB from completing the investigation. This amendment to the FCRA will provide the level of accessibility needed to overcome delays and allow for the completion of investigations. Applicants can now maintain credit protection while pursuing the path of protecting our National Security.
Applicable excerpts of the law follow (emphasis added):
Public Law No: 115-174 (05/24/2018)
Economic Growth, Regulatory Relief, and Consumer Protection Act
(Sec. 301) The bill amends the Fair Credit Reporting Act to increase the length of time a consumer reporting agency must include a fraud alert in a consumer's file. It also: (1) requires a consumer reporting agency to provide a consumer with free credit freezes and to notify a consumer of their availability, (2) establishes provisions related to the placement and removal of these freezes, (3) creates requirements related to the protection of the credit records of minors.
Section 301 (4) Exceptions.—A security freeze shall not apply to the making of a consumer report for use of the follow:…(I) Any person using the information for employment, tenant, or background screening purposes."
- end -