Credit check laws for employers: where you can and cannot pull credit
On this page
Federal law allows employers to run credit checks on applicants as long as they follow the Fair Credit Reporting Act. Several states and cities go further and ban employment credit checks except for listed jobs, such as roles handling significant money, managerial roles, positions where another law requires a check, and jobs at banks and other financial institutions. As of October 2026, the state laws we checked are California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont and Washington, with Delaware covering only public employers, and New York City, Chicago, Philadelphia and the District of Columbia have their own.
This page covers where credit checks are restricted, what the common exceptions look like, and a way to decide whether a particular role qualifies. The FCRA process itself, from disclosure to adverse action notice, is covered step by step in the FCRA background check process.
Not legal advice. This page summarizes the statutes and city codes linked below as of October 2026. We could not confirm whether any additional state enacted an employment credit check law in 2024 to 2026, so treat the list as the laws we verified rather than a complete national list. Exemption wording matters and differs from law to law; have counsel confirm before running a credit check in any of these places.
The federal layer
When a screening company supplies a credit report, it is a consumer report, and the FCRA applies:
- Before the check: a clear and conspicuous written disclosure, "in a document that consists solely of the disclosure," and the applicant's written authorization (15 U.S.C. § 1681b(b)(2)).
- Before adverse action: a copy of the report and the summary of rights (§ 1681b(b)(3)).
- Older items: credit bureaus normally may not report most adverse items older than seven years, but that limit does not apply for jobs paying, or reasonably expected to pay, $75,000 or more (§ 1681c(b)(3)).
The FTC's guide Using Consumer Reports: What Employers Need to Know notes that some states restrict the use of consumer reports, "usually credit reports," for employment. That is the layer below.
State and local credit check laws, as of October 2026
| Jurisdiction | Basic rule | Main exceptions | Source |
|---|---|---|---|
| California | No use of a consumer credit report for employment purposes unless an exception applies | Managerial positions; law enforcement; positions where law requires a report; regular access to bank or credit card account information, Social Security numbers and dates of birth; signatory or money transfer authority; access to trade secrets; regular access to $10,000 or more in cash. Does not apply to financial institutions subject to the Gramm-Leach-Bliley Act | Labor Code § 1024.5 |
| Colorado | No use of consumer credit information unless "substantially related" to the job, and no requiring consent to a report without a listed reason | Banks and financial institutions; reports required by law; listed executive, management or professional roles with fiduciary duties, access to financial information or payment authority; defense, intelligence and space contracts. Applicants may explain mitigating circumstances, and reliance must be disclosed before adverse action | C.R.S. § 8-2-126 |
| Connecticut | Employers with one or more employees may not require consent to a credit report as a condition of employment unless an exception applies | Financial institutions (broadly defined); reports required by law; reasonable belief of a law violation related to the job; substantially job-related reasons disclosed in writing, including managerial roles, access to financial information, fiduciary roles, expense accounts or corporate cards, and trade secrets | Gen. Stat. § 31-51tt |
| Delaware (public employers only) | A public employer may not consider credit history or score during the initial application process, up to and including the first interview | Police, corrections, justice, courts and similar | 19 Del. C. § 711 |
| Hawaii | Credit history may be considered only after a conditional offer, and the offer withdrawn only if it directly relates to a bona fide occupational qualification | Employers permitted or required by law to check credit; managerial or supervisory employees; financial institutions with federally insured deposits | HRS § 378-2.7 |
| Illinois | No hiring decisions based on credit history, no inquiry about it, no ordering reports | Banks, insurers, debt collectors and some public bodies are outside the Act; bona fide occupational requirements include bonding required by law, access to $2,500 or more in assets, signatory power over $100 or more per transaction, managerial roles, and access to confidential or financial information | 820 ILCS 70 |
| Maryland | No use of credit history to deny employment or set pay or terms | After an offer for a purpose other than those barred; a bona fide, substantially job-related purpose disclosed in writing; FDIC-insured institutions and some other financial employers excluded | Lab. & Empl. § 3-711 |
| Nevada | No requesting, using or acting on a credit report or credit information | Checks required by law; reasonable belief of illegal activity; information reasonably related to the job, including handling money or assets, managerial roles, financial institutions and licensed gaming establishments | NRS 613.570, 613.580 |
| Oregon | No obtaining or using credit history for employment purposes | Federally insured banks and credit unions; employers required by law; certain public safety roles; substantially job-related information with reasons disclosed in writing | ORS 659A.320 |
| Vermont | No inquiry into credit and no adverse action based on it | Required by law; access to confidential financial information; financial institutions; law enforcement, emergency medical and fire roles; financial fiduciary roles; access to payroll information; a showing that credit is a valid and reliable predictor of performance. Even then, credit may not be the sole factor and written consent is needed each time | 21 V.S.A. § 495i |
| Washington | No obtaining a report containing credit information unless substantially job related with reasons disclosed in writing, or required by law | Job-related use with written reasons; extra steps before adverse action | RCW 19.182.020 |
| New York City | No requesting or using consumer credit history for employment purposes | Required by law; police and peace officers; certain high-trust public roles; bonding required by law; security clearance; regular access to trade secrets or national security information; signatory authority over $10,000 or more; roles able to modify digital security systems. The city says exemptions are construed narrowly and recommends keeping an exemption log for five years | Admin. Code § 8-107(24); CCHR guidance |
| Chicago | Same structure as the Illinois Act | Similar thresholds and exclusions to the state law | Municipal Code § 6-10-053 |
| Philadelphia | No procuring, seeking consent for or using credit information | Required by law; bonding; supervisory or managerial roles; significant financial responsibility (not retail transactions); access to financial or confidential information | Code § 9-1130 |
| District of Columbia | Credit information is a protected trait; employers may not request it, require it or inquire into it | Required by D.C. law; law enforcement roles; positions requiring a security clearance; financial institutions for positions with access to personal financial information; some public offices | D.C. Code § 2-1402.11 |
What the exceptions have in common
Reading the laws side by side, the exceptions fall into six groups. Most laws use some of these, none uses all of them in the same words:
- Another law requires the check. Present in nearly every law. Ask for the specific statute or regulation.
- The employer is a financial institution. Defined differently each time: federally insured banks in Hawaii and Oregon, Gramm-Leach-Bliley entities in California, a broader list in Connecticut, and only for certain positions in the District of Columbia.
- The job handles money or assets. Expressed as dollar thresholds in some places: $10,000 in cash in California, $2,500 in assets or $100 per transaction in Illinois, $10,000 in signatory authority in New York City.
- The job is managerial. Usually limited to roles that set the direction of the business, not every supervisor.
- The job has access to sensitive information, such as trade secrets, personal financial data or national security information.
- Law enforcement and public safety roles.
Several laws also require the employer to state the job-related reason in writing before running the check, and some, such as Colorado and Washington, add steps before an adverse decision on top of the FCRA's.
Deciding whether a role qualifies
An invented example of how to work through a request from a hiring manager:
| Role | Location | Analysis | Outcome |
|---|---|---|---|
| Accounts payable specialist who releases vendor payments up to $50,000 | Chicago | Signatory power over $100 per transaction fits the Illinois and Chicago exception | Credit check may be allowed; record the reason |
| Retail sales associate handling a register | Philadelphia | Philadelphia's exception for significant financial responsibility excludes retail transactions | No credit check |
| Marketing manager with a corporate card | California | A corporate card is not one of California's listed exceptions, and "managerial" there means the executive exemption standard | Likely no; check with counsel |
| Software engineer | New York City | Access to trade secrets can qualify only for non-clerical roles with regular access, and the city reads exemptions narrowly | Usually no; if used, log the exemption |
If the role qualifies, run the check through the FCRA process, at the stage the law allows (Hawaii, for example, only after a conditional offer), and keep the written reason with the hiring record. If it does not, remove credit from that role's background package rather than ordering it and ignoring it.
What changed in 2025 and 2026
- The federal medical debt rule is gone. The Consumer Financial Protection Bureau's January 2025 rule limiting medical debt in credit reports was vacated by a federal court on July 11, 2025, at the joint request of the bureau and the plaintiffs. Medical debt may therefore appear on reports where state law does not stop it.
- The CFPB took a broad view of FCRA preemption. An interpretive rule published October 28, 2025 says the FCRA generally preempts state laws touching broad areas of credit reporting, with a focus on what credit bureaus may report. It does not address state laws on employers' use of credit, and we found no court ruling applying it to the laws in the table.
- No new state law confirmed. We did not find substantive changes to the laws in the table in 2025 or 2026, although the District of Columbia amended its human rights law in 2025 in ways we did not review, and we could not confirm whether any new state passed an employment credit check law in this period.
For recruiters: keep credit out of the conversation
- Do not ask about debts, bankruptcy, missed payments or credit scores in screens or interviews. Most of these laws bar inquiry as well as reports, and elsewhere the questions are listed among risky interview questions.
- Do not search for it yourself. Several of these laws bar inquiring into credit history, not just ordering a report, so looking up debts, judgments or bankruptcies online can raise the same problem.
- Tell candidates what the background check includes, using a notice such as the background check notification email, so a credit check is never a surprise.
- Agree the package per role at intake with the client, including whether credit is in it and on what legal basis, and keep that note with the job order.
Questions people ask
Is it legal for employers to run credit checks on applicants?
Federally, yes, if the employer follows the Fair Credit Reporting Act: a stand-alone written disclosure, the applicant's written authorization, and notice steps before and after any adverse action. But at least ten states, plus New York City, Chicago, Philadelphia and the District of Columbia, ban or restrict employment credit checks except for listed types of jobs or employers.
Which states restrict employer credit checks?
As of October 2026, the state laws we checked are California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont and Washington, plus Delaware for public employers only. New York City, Chicago, Philadelphia and the District of Columbia have their own laws. Check the exact text, because each one defines its exceptions differently.
Can a bank still run credit checks on job applicants?
In most of these jurisdictions, yes. California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Oregon, Vermont and others exclude banks or financial institutions in some form, though the definitions differ and some exemptions cover only certain positions. Read the specific exemption for the state or city rather than assuming the whole company is exempt.
Can I ask a candidate about their debts or bankruptcy in an interview?
Avoid it. In jurisdictions that restrict credit checks, the laws usually bar inquiring about credit history as well as pulling a report. Elsewhere, the EEOC treats financial questions as a possible source of discrimination. If a job genuinely calls for a credit review, it belongs in the employer's formal background process, not the interview.