Credit History in Employment: Virginia Laws & Your Rights

The Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., is the primary federal law governing employer use of credit reports. Under the FCRA, employers may obtain a consumer report (including a credit report) only if they have a legitimate business purpose and have obtained the consumer's written consent before requesting the report. The law defines 'legitimate business purpose' broadly but does not restrict employers to specific job categories.

When an employer uses a credit report or credit information to make an employment decision adverse to the applicant or employee (such as a denial of hire, promotion, or termination), the employer must provide the individual with an adverse action notice that includes: (1) notice that the decision was made in whole or in part based on the credit report; (2) the name and contact information of the credit reporting agency that furnished the report; and (3) a statement of the individual's right to dispute the accuracy of the report and to receive a free copy of the report within 60 days.

The EEOC has issued guidance cautioning that blanket use of credit checks or reliance on poor credit scores may have a disparate impact on protected classes, particularly African American and Hispanic workers, and may violate Title VII of the Civil Rights Act of 1964 if not job-related and consistent with business necessity. The FCRA is enforced by the Consumer Financial Protection Bureau (CFPB), the FTC, and private right of action allows individuals to sue for violations. Remedies include actual damages, statutory damages of up to $1,000, punitive damages, and attorney fees.

Virginia does not have an independent state law that restricts employer use of credit reports beyond the requirements of the federal Fair Credit Reporting Act (FCRA). Virginia Code § 40.1-1 and the Virginia Employment Commission Code establish the general framework for employment law but do not address credit checks specifically. This means that Virginia employers are governed exclusively by federal FCRA requirements, not by any state-specific credit check restrictions.

Virginia employers may therefore request and use credit reports for employment decisions, provided they comply with FCRA requirements: obtaining written consent before pulling a report, providing adverse action notice if credit information is used to deny employment, and ensuring compliance with disclosure requirements. Unlike some states (such as California, which restricts credit checks to positions involving financial responsibility, and New York, which imposes strict limitations on when and why employers can check credit), Virginia has not enacted statutory limitations on which job categories may be subject to credit checks.

However, Virginia employers are still subject to EEOC scrutiny under Title VII and the Americans with Disabilities Act (ADA) if credit checks are used in a manner that has a disparate impact on protected classes or that incorporates disability-related information. Virginia state courts have not developed unique common-law protections for credit discrimination beyond FCRA compliance. The Virginia Employment Commission does not maintain separate regulations on credit checks.

Virginia employers covered by federal law (those with 15+ employees) must comply with the FCRA and EEOC guidance; smaller employers are technically not covered by Title VII but are still bound by FCRA requirements. Virginia has adopted the Uniform Trade Secrets Act (UTVA) and other standards that may indirectly support using background checks and credit reports for positions involving access to sensitive business information, but these do not expand employer rights beyond federal law.

The FCRA permits employers to obtain credit reports without written consent if they comply with the exceptions under 15 U.S.C. § 1681b, though employment contexts almost always require consent. Employers may conduct credit checks for positions that Virginia courts or the EEOC would consider legitimate business-purpose roles, including those involving financial responsibility, access to confidential or proprietary information, or positions with significant decision-making authority affecting company assets.

Employers are not required to consider applicants or employees who decline to consent to a credit check, though the decision not to hire based solely on refusal to consent (rather than the content of the report) may be less legally vulnerable. An employer's legitimate use of a credit report for a management, supervisory, or finance role does not violate anti-discrimination law merely because the applicant belongs to a protected class, provided the credit information is job-related.

At-will employment principles apply in Virginia, meaning employers can generally terminate at-will employees for any reason that is not unlawful. However, termination based on information discovered through a credit check that violates Title VII (such as disparate impact on race or national origin) remains unlawful. Inaccurate credit information obtained from a third-party credit reporting agency, if relied upon, may give rise to FCRA liability even if the employer had legitimate reasons to check credit.

State or federal government agencies may conduct credit checks as part of background investigations for public employment without the same FCRA restrictions that apply to private employers, though federal employees are subject to additional laws. Employers are not required to hire or retain an employee based on a clean credit report; credit information is one of many employment factors. Self-employed individuals and sole proprietorships do not have legal restrictions on checking credit reports of their owners. Union-represented employees may have additional protections through collective bargaining agreements that restrict use of credit checks, which would supersede employer policies in those contexts.

Step 1: Document everything related to the credit check and adverse employment decision. Keep copies of the job posting, your application, any written materials provided to you about background or credit checks, the written consent form you were asked to sign (or evidence you were never asked), the dates of all communications, and records of any conversations with hiring managers or HR representatives. If you believe the credit report contained inaccurate information, obtain a copy of your credit report from the credit reporting agency and note any errors. Preserve emails, letters, or written rejection notices that mention credit history, credit report, credit score, or financial background. If you were terminated, keep any performance reviews, emails, or memos that might show your credit history was the real reason for termination.

Step 2: Understand Virginia's internal complaint process and why it matters. Virginia does not have a state agency dedicated solely to credit discrimination complaints, unlike some states. However, if the credit check or decision also involved discrimination based on race, color, religion, sex, national origin, age (40+), disability, or genetic information, you may file with the Virginia Council on Human Rights (VCHR), which works in conjunction with the EEOC. Even if the credit issue is the primary claim, document whether your employer has an internal complaint or appeal process—review your employee handbook, HR policies, and onboarding materials for any grievance procedure. Filing an internal complaint (if one exists) creates a paper trail and may toll deadlines or demonstrate good faith, though it is not required and is unlikely to result in reversal. For pure FCRA violations (improper consent, no adverse action notice, failure to disclose the source of the credit report), there is no state agency process in Virginia; you must proceed directly to federal remedies.

Step 3: File a charge with the appropriate agency. For claims involving discrimination on a protected basis (Title VII: race, color, religion, sex, national origin; ADA: disability; ADEA: age 40+; or genetic information), file a Charge of Discrimination with the EEOC at the Richmond District Office, which covers Virginia. The EEOC's Richmond office is located at 3600 West Broad Street, Richmond, VA 23230. You can file by mail, phone at (804) 771-2000, or online at eeoc.gov. You have 180 days from the date of the alleged unlawful employment action to file an EEOC charge in Virginia (a non-deferral state), though filing with the VCHR first, which automatically files with the EEOC, extends this to 300 days. Include in your charge: your name, address, and phone number; the employer's name, address, and contact person; the date the alleged discrimination occurred; a clear description of what happened (e.g., 'Employer pulled my credit report without my written consent' or 'Employer denied me the job based on my credit score, which was negative because of medical debt from a disability-related illness'); the protected basis if applicable (e.g., race, disability, age); and whether you filed with the VCHR first.

For pure FCRA violations (no written consent, no adverse action notice, inaccurate information not corrected), you may file a complaint with the Consumer Financial Protection Bureau (CFPB) at consumerfinance.gov/complaint or by mail to the CFPB, P.O. Box 4503, Iowa City, IA 52240. You may also file a complaint with the Federal Trade Commission (FTC) at reportfraud.ftc.gov. The CFPB and FTC do not provide direct remedies but investigate and may take action against the employer or credit reporting agency. Simultaneously, you have the right to file a private lawsuit under the FCRA in federal district court (in the Eastern District of Virginia if you were employed in Virginia) or Virginia state court. The statute of limitations for FCRA claims is two years from discovery of the violation or five years from the violation itself, whichever is longer.

Step 4: Understand the investigation process and timeline. If you filed with the EEOC, the agency will open an investigation, typically assigning it to an investigator. You will receive a notice of investigation, and the investigator may contact your employer and request documents such as the credit check authorization form, the credit report, communications about the hiring or termination decision, and any policy on credit checks. The EEOC typically completes investigations within 180 days, though this may be extended. During the investigation, you may be contacted for an interview and asked to provide additional details or documents. You should respond promptly and provide all requested information. After the investigation closes, you will receive a determination: if the EEOC finds reasonable cause to believe discrimination occurred, it will attempt conciliation; if conciliation fails, you will receive a right-to-sue letter, which you must obtain before filing a private lawsuit. This process typically takes 4 to 12 months.

If you filed an FCRA complaint with the CFPB or FTC, those agencies do not conduct investigations on behalf of individuals; instead, they compile complaints and may take enforcement action against companies for systematic violations. You will not receive individual remedies through these channels unless you file a private lawsuit. For a private FCRA lawsuit, you may sue the employer and/or the credit reporting agency in federal or state court. The discovery process will reveal the employer's credit check policy, the source of the credit report, and whether proper disclosures were made.

Step 5: Consult an attorney and determine the type you need. If you believe you experienced discrimination based on a protected characteristic (race, color, religion, sex, national origin, age 40+, disability, or genetic information) in connection with a credit check, consult an employment law attorney who handles discrimination cases. Many will handle EEOC charges on a contingent fee basis (you pay only if you win). An employment discrimination attorney can evaluate whether your credit check was used as a pretext for discrimination or had a disparate impact on your protected class.

If your primary claim is an FCRA violation (unauthorized credit check, no adverse action notice, inaccurate information, lack of consent), consult an attorney experienced in FCRA litigation or consumer protection law. Some attorneys specialize in FCRA cases and will take them on contingency because the FCRA provides for statutory damages and attorney fees. Many will offer a free consultation to review whether you have a viable claim. To find an attorney in Virginia, contact the Virginia State Bar's Lawyer Referral Service at (804) 775-0500 or visit vsb.org. Consider consulting both an employment attorney (for discrimination) and a consumer rights attorney (for FCRA violations) if your case involves elements of both.