Understanding the Role of Consumer Reporting Agencies

December 12, 2025

When employers run background checks, it’s easy to assume that every company providing these services operates the same way. But, there’s an important distinction that many hiring teams overlook: the Consumer Reporting Agency (CRA).

What Is a Consumer Reporting Agency (CRA)?

Under the Fair Credit Reporting Act (FCRA), a Consumer Reporting Agency is an entity that:

“Regularly engages, in whole or in part, in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties.”

In simpler terms, a CRA is legally authorized to gather and provide certain types of personal background information to employers, landlords, lenders, and other entities for permissible purposes. The Fair Credit Reporting Act (FCRA) sets specific legal requirements for CRAs. These requirements impact how information is collected, verified, and shared to ensure accuracy, fairness, and protection of collected information.

Types of Reports CRAs Provide

CRAs supply several different categories of consumer reports, including:

Pre-employment background checks
Credit reports
Criminal record reports
Driving records
Identity verification reports

Industries That Commonly Rely on CRAs

You’ll find CRAs supporting organizations such as:

Employers across all sectors
Financial institutions
Government agencies
Healthcare organizations
Transportation/logistics companies

Key Responsibilities of a CRA

CRAs must comply with strict FCRA standards. Their responsibilities include:

Collecting and verifying public record information
- This includes criminal court data, driving history, employment records, and more.
Compiling consumer reports
- CRAs assemble the collected information into a legally compliant report.
Ensuring data accuracy and completeness
- The FCRA requires CRAs to use “reasonable procedures” to ensure maximum possible accuracy of the information they provide.
Protecting consumer rights
- CRAs must follow specific regulations regarding consumer consent, disclosures, and dispute resolution.

How Background Reports Are Created

While every CRA operates differently, the general process looks like this:

Confirming permissible purpose
- Before running a background check, the CRA must verify that the employer has a legitimate, FCRA-compliant reason for requesting the report.
Conducting research
- Depending on the package ordered, this may include:
  - County-level, statewide, or federal criminal record searches
  - Employment verification
  - Education verification
  - Motor Vehicle Records (MVRs)
  - Drug test coordination
  - Identity verification tools
Reviewing and quality-checking results
- CRAs compare identifiers (e.g., name and date of birth) to ensure accurate record matching.
Delivering the report
- After internal quality checks, the completed report is delivered to the employer through a secure portal.

Why CRAs Play a Critical Role

Employers rely on CRAs because they provide:

Protection against negligent hiring claims: Accurate reporting helps employers avoid hiring individuals who may pose unnecessary risk in sensitive roles.
Safer workplaces and communities: Reliable background checks reduce organizational risk and support safety cultures.
Accurate, timely data for informed hiring decisions: CRAs ensure employers have information needed to make confident, compliant decisions.

Where Per Mar Security Services Fits In

Unlike large, national CRAs that depend heavily on database-only searches, Per Mar performs hands-on, high-accuracy investigations with a strong emphasis on local records, compliance, and customer service.

This means employers get:

Researchers review county-level data
Human verification of identifiers
Customized search packages
Higher accuracy and fewer false positives
Personalized support from an experienced background investigations team

Whether you’re a small business hiring your first employee or a large company with frequent hiring needs, choosing a knowledgeable, FCRA-compliant partner like Per Mar ensures you’re getting accurate, timely, and legally sound background reports.