The Illinois credit repair laws and legislation around accessing credit information extend beyond the federal laws and those applied in many other states.
If you are in any doubt about whether your credit information has been used illegally or are worried about your credit file impacting your employment prospects, be sure to get in touch with The Phenix Group for guidance from an established expert on fast credit repair in Chicago.
Federal Versus Illinois Credit Reporting Rules
Across the U.S., businesses must adhere to the Fair Credit Reporting Act (FCRA), which regulates who can use, keep, or provide information to credit reporting bureaus. Employers are allowed to access credit reports, with consent, according to FCRA rules.
In Illinois, the Employee Credit Privacy Act was enacted in 2011 and takes things further. This Act states that employers are not legally allowed to use credit files to make decisions about hiring or firing employees or as a basis for setting pay or working conditions.
Essentially, employers are not permitted to discriminate based on any employee’s (or prospective employee’s) credit report, nor can they access credit files. There are some exceptions, with organizations such as law enforcement agencies, banks, insurance companies, and debt collectors not covered. However, there must be a legitimate and legally valid reason to request credit reporting information.
Scenarios Where the Illinois Credit Privacy Act Does Not Apply
As mentioned, some companies, such as debt collection agencies, are permitted to request credit file information. This is primarily to ensure anybody they employ is not in severe debt or financial hardship and potentially vulnerable to misappropriating collected funds.
Can collection agencies sue you in Illinois? They can, but only if they have sufficient evidence of failure to pay a valid debt, and only if the debt owed is within a statute of limitations–normally up to ten years, if there is a signed contract.
In other cases, employers are allowed to use credit reports, with your permission, depending on the role or position you have applied for. These conditions might provide a justification:
- Unsupervised access to cash of $2,500 or above
- Control of assets worth $100 or above per transaction
- Illinois Department of Labor requirements
- Managerial posts with business decision-making or control
- Access to private or confidential data
If an employer requests permission to access your credit file, there must be a verifiable reason. In past court courses, judges have found that, for example, staff managing credit applications should not be subject to credit checks because they have no direct access to confidential information–they simply pass the information to the underwriter.
Cashiers may also be protected by the Act because, although they usually have access to cash, their work is normally supervised.
Consequences for Employers in Breach of the Employee Credit Privacy Act
Employers are prohibited from taking retaliative action against employees who have filed complaints, assisted in investigations, testified in a case, or taken action against a violation of the Employee Credit Privacy Act.
Staff members or job applicants can sue a business if they believe they have been discriminated against due to their credit history or that the company has accessed their credit report unlawfully.