A Complete Guide to FCRA-Compliant Background Checks in 2026

The Fair Credit Reporting Act is a federal law that regulates how consumer reporting agencies (CRAs) collect, use, and share consumer information — and how businesses that use that information (called "users") must handle it.

Background check companies like Background Check Solutions are CRAs under the FCRA. Landlords and employers who order background checks are users. Both have obligations under the law.

The FCRA's core goals are accuracy, fairness, and privacy. It gives consumers the right to know what is in their reports, to dispute inaccurate information, and to be notified when a report is used against them.

Before ordering a background check on a rental applicant or job candidate, you must provide them with a clear written disclosure that a consumer report may be obtained. For employment purposes, this disclosure must be a standalone document — it cannot be buried in the employment application.

You must also obtain the applicant's written authorization before ordering the report. Electronic signatures are generally acceptable, but you should consult with an attorney about the requirements in your jurisdiction.

Keep copies of all signed disclosures and authorizations. If a dispute arises, these documents are your evidence of compliance.

If you intend to take adverse action — denying a rental application, rescinding a job offer, or terminating employment — based in whole or in part on information in a background check, the FCRA requires a two-step notice process.

Step one is the pre-adverse action notice. Before taking the adverse action, you must provide the applicant with: a copy of the consumer report, a written summary of their rights under the FCRA (provided by the CRA), and notice that you are considering taking adverse action based on the report.

After providing the pre-adverse action notice, you must wait a reasonable period — typically five business days — to give the applicant an opportunity to dispute any inaccurate information in the report.

Step two is the adverse action notice. After the waiting period, if you proceed with the adverse action, you must notify the applicant that adverse action has been taken, provide the name and contact information of the CRA that provided the report, and inform them of their right to obtain a free copy of the report within 60 days and to dispute its accuracy.

The FCRA sets a federal floor — states and localities can impose additional requirements. In 2026, landlords and employers must be aware of a growing patchwork of state laws that go beyond federal requirements.

"Ban the box" laws in many jurisdictions restrict when employers may ask about criminal history. Some states require an individualized assessment before taking adverse action based on a criminal record. Several states restrict or prohibit credit checks for employment purposes.

For tenant screening, some states limit how far back a landlord may look at criminal history, restrict the use of eviction records, or require specific language in adverse action notices.

Always consult with a qualified attorney familiar with the laws in your state and city before implementing a screening policy.

Use a reputable, FCRA-compliant background check provider. Your CRA should provide you with the required disclosure and authorization forms, and should be able to answer questions about compliance.

Establish a written screening policy before you begin accepting applications. Apply your criteria consistently to every applicant to reduce the risk of discrimination claims.

Train anyone involved in the screening process on FCRA requirements and your internal policy. Document your compliance steps for every applicant.

When in doubt, get legal advice. The cost of a consultation with an employment or landlord-tenant attorney is far less than the cost of an FCRA lawsuit.