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Employment
Credit Check
Part of Your Condition of Employment?
A
pre-employment background screening often includes an employment credit
check.
In case you did not know, a potential
employer may seek to see a copy of your credit report.
An
employment report typically includes:
- Information
about your credit-payment history
- Other credit
habits from which current or potential employers might draw conclusions
about you
- An established record of paying bills on
time
- Information about your former addresses and
previous employers
Employers can use this as one
way to verify the accuracy of information you provide on a job
application or resume.
An employment report
provides everything a standard credit report would provide.
However
it does NOT
include:
- Your credit score
- Date
of birth
- An "inquiry" on your credit file that may
be seen by a company looking to issue you credit
Note:
Having too many credit inquiries tends to lower your credit score.
Why
do employers conduct a pre employment credit check?
- To
gauge your level of responsibility
- Whether a valid
assumption or not, some employers believe if you are not reliable in
paying your bills, then you will not be a reliable employee
- To
verify that an applicant is responsible and reliable
- Concern about hiring persons who
cannot manage their affairs, or whose monthly debt payments are too
high for the salary involved
- Many employers limit
credit reports to management and executive positions...or to positions
that have access to cash, assets, a company credit card, or
confidential information
Unfortunately, a bad
credit report can work against you in your search for employment.
Employers
can request credit reports before making a hiring decision, but
applicants should be aware of their rights in this regard.
For
many companies, a credit report has become a screening tool to evaluate
a candidate and to exercise due diligence in the hiring process.
But
for job applicants, a credit report can feel like an invasion of
privacy or a violation of their rights.
However, job
applicants have substantial legal protection concerning
the use of
credit reports for employment.
- In fact, an
employer cannot obtain a credit report without an applicant's written
permission and cannot use it to deny a job until the applicant has had
the chance to review the report
- Many employers
first determine if there is a sound business reason to obtain a credit
report
- Unless the information in a credit report is
directly job related, its use can be considered discriminatory
- Employers
try to avoid making negative hiring decisions on information that is
old or relatively minor
If you are concerned
about your employment credit check, you should first contact all three
major credit bureaus and request a copy of your personalized credit
report.
The three major credit reporting agencies (Experian, TransUnion, and
Equifax)
provide a modified version of the credit report called an
"employment report."
If you find you have bad credit
and want to clear it up, there are excellent credit-counseling services
available, such as the National Foundation for Consumer Credit.
Unfortunately,
there also are scam artists who make false or misleading claims, so use
caution when choosing a credit reporting agency.
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