Which of the following best describes credit reports?
A) Organizations must advise and receive written consent from the applicant they request a credit report.
B) Organizations can request a report on any employee at any time without consent.
C) Organizations do not have to inform applicants if adverse decisions are made based on information in the report.
D) Organizations cannot make adverse decisions based on information in such a report.

Question

Quizplus · Accepted Answer

Credit reports are confidential documents that contain information about a person's credit history, payment behavior, and creditworthiness. Organizations must notify and receive written consent from the applicant before requesting their credit report. This is stipulated by the Fair Credit Reporting Act (FCRA) in the US, which requires organizations to inform applicants that they will use the information in the report to make decisions about employment, credit, and insurance.

Therefore, option B is incorrect as organizations cannot request a credit report on any employee without their consent.

Option C is also incorrect as organizations are required by law to inform applicants if adverse decisions are made based on the information in their credit report.

Option D is also incorrect as organizations can use the information in the credit report to make adverse decisions about an applicant. However, they must notify the applicant and provide them with a copy of the report and an explanation of their rights under the FCRA.

Which of the Following Best Describes Credit Reports