What’s a CRA Background Check and Why Does it Matter?

Famous Times Contributor

By: Accurate

Background checks for employment are a critical step to ensure the credibility and qualifications of potential hires. These checks are often conducted by Consumer Reporting Agencies (CRAs), which play a crucial role in providing accurate and reliable information to employers. But you might have questions like the following:

What is a CRA?
How does that relate to background checks?
When are CRA screenings required?
What’s the difference between a CRA background check and one conducted by someone else?

Let’s take a look at the answers.

What is a Consumer Reporting Agency (CRA)?

A Consumer Reporting Agency, or CRA, is an organization that collects and compiles consumer information for the purpose of creating consumer reports. These reports are used by businesses to make informed decisions about potential employees, tenants, or borrowers. The big CRAs are firms you’ve heard of, like Equifax, Experion, and TransUnion, known for providing credit reports. But there are dozens of other CRAs across the country specializing in providing background screens for employment.

CRAs are regulated under the Fair Credit Reporting Act (FCRA), which sets guidelines for how consumer information must be handled to ensure accuracy, fairness, and privacy.

CRA and Employment Background Checks

In the context of employment, CRAs provide background screening services that help employers verify the identity, credentials, and history of job applicants. This process typically includes checks on things like criminal records, credit history, employment history, education, and sometimes even social media activity. The information gathered by CRAs enables employers to make well-informed hiring decisions and mitigate risks associated with negligent hiring.

When is a CRA Screen Required?

While background checks for any new hire are a good idea, there are some situations where a CRA screen is required, including the following:

High-Responsibility Positions: Jobs that involve handling sensitive information, finances, or vulnerable populations often require thorough, professional background checks to ensure the applicant’s trustworthiness and reliability.

Regulated Industries: Certain industries, such as finance, healthcare, and transportation, have strict regulatory requirements mandating background checks for employees. CRAs help ensure compliance with these regulations.

Distinguishing CRA Background Checks from Other Checks

It’s important to understand the difference between background checks conducted by CRAs and those done by non-CRA entities. Differences include things such as:

Regulation and Compliance: CRAs operate under the FCRA, ensuring the information they provide is accurate, fair, and used responsibly. Non-CRA entities may not be bound by these stringent regulations, potentially leading to inaccurate or outdated information.
Accuracy and Reliability: CRAs have access to comprehensive databases and resources that allow them to compile detailed and reliable reports. Non-CRA checks may rely on limited or less reliable sources, resulting in incomplete or erroneous information.
Consumer Rights: The FCRA provides specific rights to individuals undergoing background checks by CRAs, including the right to be informed of the check, to consent to it, and to dispute inaccurate information. These protections may not apply to checks conducted by other means.
Professionalism and Expertise: CRAs specialize in background screening and have established processes and expertise to handle the complexities of collecting, verifying, and storing personal information. Non-CRA entities might lack the same level of expertise and thoroughness.

Are Your Background Checks Done By a CRA?

CRA background screening is a vital component of the hiring process, providing employers with the information they need to make informed decisions while ensuring compliance with legal standards. The only way to conduct a background check with confidence is to use a CRA.