Is It Legal for Employers to Run a Credit Check for a Job in Maryland?

Receiving a request to authorize a pre-employment credit check-or being pressured by a recruiter to lift a security freeze on your Equifax, Experian, or TransUnion file-can trigger immediate anxiety if medical debt or a past layoff hurt your credit score. In Maryland, the General Assembly recognized that personal credit history rarely predicts workplace performance. Under the Job Applicant Fairness Act (Md. Code, Lab. & Empl. § 3-711), employers across Baltimore, Annapolis, Columbia, and Towson are strictly prohibited from using a job applicant's or current employee's credit report or credit history to deny employment, discharge a worker, or determine compensation and working conditions.

Unlike criminal background statutes that only apply to companies above a certain headcount, Md. Code, Lab. & Empl. § 3-711 applies to private and public employers of all sizes across Maryland unless a specific statutory exemption applies. Even when an employer qualifies for an exception, they must navigate both Maryland's written disclosure rules and federal consumer protection mandates.

Exempt Professions: When Can a Maryland Employer Run a Credit Check?

The statute divides permissible credit checks into two distinct categories: entirely excluded financial employers under Md. Code, Lab. & Empl. § 3-711 subsection (a), and specific job roles where a covered employer has a bona fide, substantially job-related purpose that is disclosed in writing to the candidate under subsection (c).

Bank Tellers and Federally Insured Financial Institutions

Financial institutions that accept deposits insured by a federal agency (such as the FDIC or NCUA), including their subsidiaries and affiliates, as well as credit union share guaranty corporations approved by the Office of the Commissioner of Financial Regulation, Baltimore, are completely exempt from the law. Whether you are applying to work as a front-line bank teller, loan processor, or branch receptionist in Maryland, a bank can legally evaluate your credit report prior to hiring.

Registered Investment Advisors

Entities-and their corporate affiliates-that are registered as investment advisors with the United States Securities and Exchange Commission under the Investment Advisers Act of 1940 (15 U.S.C. § 80b-3) are likewise excluded from the prohibition. Wealth management firms and broker-dealers in Bethesda and Baltimore routinely review applicant credit histories to assess financial regulatory risk.

Employees Handling Company Expense Accounts or Corporate Cards

For standard commercial employers not in the banking sector, Md. Code, Lab. & Empl. § 3-711 permits a credit check as a bona fide job-related requirement if the employee will be provided with an expense account or a corporate debit or credit card. For example, an outside pharmaceutical sales representative or regional field technician issued a company Visa card for travel expenses falls within this statutory carve-out.

Management Roles With Fiduciary Duties and Trade Secret Access

A covered employer may also request and use credit history when filling high-trust roles, provided the employer gives the applicant written notice of the bona fide job-related reason. Under Md. Code, Lab. & Empl. § 3-711, these substantially job-related positions include:

• Managerial Positions: Roles that involve setting the direction or control of a business, or a department, division, unit, or agency of a business.
• Fiduciary Responsibility Roles: Positions carrying a legal fiduciary duty to the employer, specifically including the authority to issue payments, collect debts, transfer money, or enter into binding contracts on the company's behalf.
• Sensitive Personal Information Access: Jobs with access to confidential personal information of customers, employees, or the employer as defined under the Maryland Personal Information Protection Act (Md. Code, Com. Law § 14-3501) (explicitly excluding routine customer payment data handled in a standard retail transaction).
• Trade Secrets and Proprietary Data: Positions granted access to confidential formulas, programs, techniques, or compilations that derive independent economic value from not being generally known.

What to Do If Illegally Asked to Lift a Credit Freeze

Many Maryland residents maintain a security freeze on their credit files pursuant to Md. Code, Com. Law § 14-1212.1 to prevent identity theft. When a company uses a third-party background vendor that bundles criminal and credit checks together, applicants for non-exempt jobs (such as warehouse associates, medical assistants, or customer support reps) are sometimes mistakenly told to lift their credit freeze so the background check can clear. If this happens to you, follow these steps:

Step 1: Request Clarification and Written Bona Fide Justification

Politely ask the human resources representative in writing whether the company is requesting a consumer credit report or only a criminal/identity verification check. Remind the employer that under Md. Code, Lab. & Empl. § 3-711, any employer pulling a credit report for a bona fide job-related reason must disclose that specific reason to the applicant in writing.

Step 2: Verify Whether the Vendor Only Needs Identity Verification

Often, background screening companies use credit bureau header data solely to verify your Social Security number and address history without pulling your actual credit history or score. Ask the employer if they can instruct their screening vendor to bypass the credit module and verify your identity through government-issued documents instead of lifting your freeze.

Step 3: Demand Federal FCRA Pre-Adverse Action Disclosures

If an employer pulls your credit report and intends to revoke a job offer, the Fair Credit Reporting Act (15 U.S.C. § 1681b) and Maryland Consumer Credit Reporting Agencies Act (Md. Code, Com. Law § 14-1203) require the employer to provide you with a copy of the report and Form CFPB-FCRA-01, Federal, Consumer Financial Protection Bureau, A Summary of Your Rights Under the Fair Credit Reporting Act before taking final adverse action. Furthermore, if you filed for bankruptcy, 11 U.S.C. § 525 prohibits government employers from denying you a job-and private employers from terminating your employment-solely due to a bankruptcy filing.

Step 4: File an Official Credit Check Complaint

If a non-exempt employer refuses to hire you because of your credit report or because you declined to lift a credit freeze for an non-exempt role, complete Form DLLR-ESS-CCC, Maryland, Department of Labor, Credit Check Complaint Form. Submit the form with copies of the authorization request, job description, and rejection notice to the Maryland Department of Labor, Division of Labor and Industry, Baltimore, and report any deceptive consumer reporting practices to the Office of the Maryland Attorney General, Consumer Protection Division, Baltimore.

How Much Does it Cost in Maryland?

• Filing a Credit Check Complaint: $0. The state administrative process is completely free for workers and job applicants.
• Credit Freeze Placement and Lifting Fee: $0. Under both federal law and Md. Code, Com. Law § 14-1212.1, credit reporting agencies cannot charge consumers to place, temporarily lift, or remove a security freeze.
• Employer Civil Penalties: Under Md. Code, Lab. & Empl. § 3-711 subsection (d), the Commissioner of Labor and Industry may assess a civil penalty of up to $500 for a first violation and up to $2,500 for each repeat violation.
• FCRA Statutory Damages in Court: If an employer willfully violates federal notice and consent procedures, an applicant suing in the U.S. District Court for the District of Maryland, Baltimore or the U.S. District Court for the District of Maryland, Greenbelt may seek statutory damages between $100 and $1,000 per violation, plus punitive damages and attorney's fees.
• Employment Attorney Rates: Maryland employment lawyers typically charge $250 to $450 for an initial consultation and handle FCRA class or individual claims on contingency or hourly rates of $300 to $550 per hour.

How Long Does the Process Take?

When an applicant files Form DLLR-ESS-CCC, Maryland, Department of Labor, Credit Check Complaint Form, the Commissioner first attempts to resolve the matter informally through conciliation within 30 to 60 days. If informal resolution fails and the Commissioner issues a formal penalty order, the employer has 30 days to request an administrative hearing. Full administrative resolution typically takes 3 to 6 months, and if an employer fails to pay a final penalty order, the state can enforce collection in the District Court of Maryland for Baltimore City, Baltimore or the Circuit Court for Anne Arundel County, Annapolis.

In EEOC v. Freeman, 961 F. Supp. 2d 783 (US District Court D. Md. 2013), a federal court in Maryland scrutinized a corporate employer's credit screening practices, noting that the company ultimately halted pre-employment credit checks following the passage of Maryland's statutory restrictions. Because Md. Code, Lab. & Empl. § 3-711 relies on administrative enforcement rather than a standalone state wrongful discharge tort under Adler v. American Standard Corp., 291 Md. 31 (MD Supreme Court 1981), pairing a state labor complaint with federal FCRA claims is often critical. Connect with a local Maryland employment lawyer in our directory to evaluate your legal options.

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