New York Fair Credit Reporting Act: What Companies Need to Know

Effective April 18th, 2026, the New York Fair Credit Reporting Act prohibits New York Employers from obtaining or using consumer credit history in hiring and personnel decisions.

New York Fair Credit Reporting Act

As a result of the New York Fair Credit Reporting Act (NYFCRA), employers in New York State may no longer obtain or use an employee's or applicant's consumer credit history in hiring or other personnel decisions.

Consumer credit history is defined as an individual’s creditworthiness, credit standing, credit capacity, or payment history, as reflected in a credit report or credit score, or information obtained directly from the individual related to credit accounts, bankruptcies, judgments, or liens. 

Prohibited Actions by Employers

Specifically, employers are prohibited from:

• Asking for or obtaining consumer credit history for employment purposes 
• Using such information when making decisions related to hiring, compensation, or any other terms or conditions of employment

Exemptions to the New York Fair Credit Reporting Act

In some instances, the regulations under the New York Fair Credit Reporting Act do not apply. 

Employers may still use or obtain consumer credit history when:

• The employer is required to obtain credit information under state or federal law, or by self-regulatory organization as defined in the Securities Exchange Act of 1934.
• Hiring a peace officer, police officer, or other law enforcement positions.
• The role is an appointed position that must undergo a state-required background investigation and involves a high degree of public trust.
• The position requires the employee to be bonded under state or federal law.
• The role requires federal or state security clearance.
• The position is non-clerical and involves regular access to trade secrets, intelligence information, or national security information.
• The individual has signatory authority over $10,000 or more in third party funds or assets or holds a fiduciary role permitting them to enter financial agreements of $10,000 or more on the employer’s behalf.
• The role includes regular duties that involve modifying digital security systems that protect the employer’s or its clients’ networks or databases.

Frequently Asked Questions

What is the New York Fair Credit Reporting Act?

The New York Fair Credit Reporting Act (NYFCRA) is a state law that significantly restricts employers from requesting, obtaining, or using an applicant's or employee's consumer credit history when making employment decisions. The law is intended to prevent discrimination based on an individual's financial history while promoting fair hiring practices.

When did the New York Fair Credit Reporting Act take effect?

The amendments to the New York Fair Credit Reporting Act took effect on April 18, 2026. Beginning on that date, most employers may no longer use consumer credit history as part of the hiring or employment process unless a specific exemption applies.

What employment decisions are affected by the new law?

Under the NYFCRA, employers generally cannot request or use consumer credit history when making decisions related to hiring, promotions, compensation, discipline, termination, and other terms, conditions, or privileges of employment.

What is considered "consumer credit history" under the law?

Consumer credit history includes more than just a credit report. It also includes, credit scores, creditworthiness, credit standing, credit capacity, payment history, information about debts, collections, bankruptcies, judgments, or liens, and information an employer obtains directly from an applicant or employee about their credit accounts or financial obligations.This broad definition prevents employers from gathering credit information through indirect means.

Are there any exceptions that allow employers to review credit history?

Yes. The law contains several limited exceptions for positions where reviewing credit information is specifically authorized or required by law or is necessary because of the duties of the position. Examples may include certain law enforcement roles, positions requiring security clearances, jobs with significant financial authority, or positions that involve access to highly sensitive trade secrets or national security information. Employers should carefully review whether an exemption truly applies before requesting credit information.

Struggling with Hiring or Compliance in New York?

New York State is the eleventh state to restrict employers’ use of credit history. Joining California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, and Washington with similar laws.

If you are struggling with New York compliance, or are having trouble hiring employees in New York State, you may want to consider reaching out to a New York HR Service for assistance. 

To learn more about how EBC HCM helps businesses hire employees in New York State, or with New York Compliance, contact us today.