Not all background checks include credit checks. For example, unless a job position entails the employee's handling large sums of cash or accessing sensitive company financial records, an employment background check most likely would not include a credit check. On the other hand, tenant and business background checks typically include credit checks.

Fair Credit Reporting Act

The Fair Credit Reporting Act (FCRA) defines the information a background check can include, as well as how far back records can be checked. Although the name contains the word "credit," its authority extends far beyond credit in its protection of consumers through advocacy of confidentiality, privacy and accuracy of gathered information. Because some states have stricter requirements than the FCRA, it's crucial for a background screener to comply with both federal and state laws.

Employment Background Checks

Employers conduct credit checks if that data is directly job-related -- for example, for management and executive positions, as well as for positions that require access to cash, assets, company credit cards or sensitive financial information. For example, an employer would likely conduct a credit check for a bookkeeper position, but not for an entry-level job with low levels of responsibility or no access to cash. Job applicants must provide written authorization before an employer performs a credit check.

Tenant Background Checks

A landlord or property management company must first obtain a potential tenant's written authorization to obtain a credit report. These reports typically include an applicant's overall credit score, summaries of credit accounts and details such as balances and monthly payments for accounts with fluctuating balances. Additional information includes rating accounts as being in good or bad status; details on installment accounts, such as car loans and student loans; and any debts forwarded to collection agencies.

Business Background Checks

Unlike a personal credit report performed as part of an employment background check, business credit reports are open to businesses conducting background checks on companies to assess their financial viability. A business credit report shows the company's credit rating, and helps business affiliates evaluate that company's legitimacy, reputation and business acumen. The three major national credit bureaus -- Experian, TransUnion and Equifax -- as well as Dun & Bradstreet offer business credit reports.

Adverse Action

The FCRA requires employers who deny employment, and landlords who deny a lease, based on information in an applicant's credit report to provide that person with an adverse action notice. This protects both the employer/landlord and the applicant. It requires the employer/landlord to forward a copy of the credit report to the applicant, who then has the opportunity to review the report, and contact the credit reporting agency to request corrections in the case of inaccurate or incomplete data.