Credit History in Employment: Missouri Laws & Your Rights

The Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., is the primary federal law regulating employer use of credit reports nationwide. Under FCRA § 1681b(b)(3), employers may obtain a consumer credit report only for permissible purposes, which include evaluating creditworthiness for positions involving access to confidential financial information, significant financial transactions, or cash. The employer must obtain clear written authorization from the employee or applicant before pulling the report. FCRA § 1681e(b) requires credit reporting agencies to maintain accurate, fair, and verifiable information in consumer reports.

If an employer takes adverse action based wholly or partly on a credit report—such as denying employment, demotion, or termination—FCRA § 1681m requires the employer to provide the applicant or employee with written notice that includes the name, address, and phone number of the credit reporting agency and the employee's right to dispute inaccurate information. The EEOC enforces FCRA compliance, and the Consumer Financial Protection Bureau (CFPB) also has authority. Employees may pursue civil claims for FCRA violations, including damages for willful non-compliance and statutory damages up to $1,000 per violation, plus attorney's fees and costs.

Missouri has no state law that specifically restricts employer credit checks beyond the federal Fair Credit Reporting Act. Missouri Revised Statutes § 285.315 addresses employer background checks generally and requires employers to provide written notice before obtaining a background report and written notice of the general nature of the background investigation. This statute does not create additional protections specific to credit checks but reinforces the notification requirement already mandated by the FCRA.

Because Missouri has not enacted an independent state credit check restriction law, employers in Missouri are governed entirely by federal FCRA requirements. This means Missouri employees have fewer protections than employees in states such as California, New York, or Illinois, which have enacted state-level laws restricting credit checks to positions with genuine financial responsibility or security-sensitive roles.

Under federal FCRA standards applicable to Missouri, employers may obtain credit reports for any job classification if they have a permissible purpose. In practice, this means a Missouri employer could lawfully check the credit history of an administrative assistant, cashier, or even an entry-level position if the employer claims a legitimate business reason such as financial access or fiduciary duty. Missouri employees do retain the federal right to receive pre-adverse-action and post-adverse-action notice and the right to dispute information on the credit report. Remedies for FCRA violations are available exclusively under federal law, including civil damages, injunctive relief, and attorney's fees.

The Fair Credit Reporting Act itself includes exceptions where credit reports may be obtained without strict adherence to all procedural protections: (1) Credit checks for national security purposes are exempt; (2) Financial institutions and creditors have certain exemptions for creditworthiness evaluations; (3) The FCRA does not apply to reports obtained from non-traditional sources (e.g., personal financial interviews, reference checks from former employers) that do not originate from a consumer reporting agency.

Employers may conduct their own internal financial background inquiries without triggering FCRA compliance, though any inquiry still must comply with other employment laws such as anti-discrimination laws. For example, if an employer interviews a candidate about personal bankruptcy or past debts directly, rather than purchasing a credit report, the FCRA's procedural requirements do not formally apply—though discrimination laws still prohibit using such information as a pretext for discrimination based on protected status.

Missouri's at-will employment doctrine does not override the FCRA; employees may still be terminated for reasons unrelated to credit reports. However, if termination is based on a credit report obtained without proper consent or without post-adverse-action notice, the employee has an FCRA claim. Additionally, if an employer relies on a credit report to make an adverse employment decision and that credit report contains inaccurate information that reflects a protected class (for example, a credit report incorrectly indicating judgment related to medical debt, which could correlate with disability), the employee may have anti-discrimination claims under the ADA, Title VII, or other statutes overlapping with the FCRA claim.

Step 1: Document Everything. Keep copies of all communications related to employment decisions, including job postings, offer letters, rejection letters, and performance reviews. If you suspect a credit check was performed, request your personnel file. Note the dates when you learned an adverse employment decision was made and any communications indicating credit was a factor. Retain copies of any written authorization forms you signed regarding background checks or credit inquiries.

Step 2: Request the Credit Report and Dispute Inaccuracies. Under FCRA § 1681g, you have the right to obtain a free copy of your credit report from any reporting agency that has information on file. Contact the three major credit bureaus (Equifax, Experian, TransUnion) at www.annualcreditreport.com or call 1-877-322-8228. If you identify inaccurate information on your report, file a dispute with the credit bureau in writing within 30 days of receiving an adverse action notice from the employer. The bureau must investigate and respond within 30 days.

Step 3: File a Complaint with the Federal Trade Commission (FTC) and Consumer Financial Protection Bureau (CFPB). If the employer obtained your credit report without written consent, failed to provide post-adverse-action notice, or took adverse action based on inaccurate information, file a complaint with the FTC at www.reportfraud.ftc.gov or by calling 1-877-438-4338. You may also file with the CFPB at www.consumerfinance.gov/complaint or call 1-855-411-2372. Include copies of any signed authorization forms, adverse action notices, and documentation showing the employer relied on credit information. The FTC typically has no formal statute of limitations for complaints, but Missouri civil claims generally must be filed within 4-5 years.

Step 4: Understand the Investigation Process. The FTC and CFPB investigate complaints to determine if FCRA violations occurred. You will not receive a formal investigation notification; instead, the agencies track complaints and may reach out to the employer. The process typically takes 30-60 days for initial assessment. If the employer violated the FCRA, the agencies may send a warning letter or initiate enforcement action. However, these agencies do not award individual damages; they focus on systemic compliance.

Step 5: Consult an Employment Attorney for Civil Litigation. For individual damages, you must file a private civil action under FCRA § 1681p in federal district court or Missouri state court. Contact an employment attorney who specializes in FCRA violations or consumer protection law. Most violations are handled on a contingency fee basis because statutory damages (up to $1,000 per violation) and attorney's fees are recoverable. Your attorney will review whether the employer lacked proper consent, failed to provide required notices, or relied on inaccurate credit information. File suit within 4 years of discovery of the FCRA violation or within the applicable statute of limitations in Missouri for breach of contract or tort claims.