Can Credit Checks Be Used in Hiring Decisions?
Employment credit checks are a detailed report of the borrowing history of potential future employers, which they can utilize to help create or influence hiring decisions. In many instances, employers who do credit checks on prospective employees do this before making an initial job offer or later when making a conditional job offer. This can give the employer an accurate picture of whether or not the applicant will be a good fit for the job.
It’s important to remember
that most hiring companies utilize a credit report as part of their background investigation into job candidates. So if you’re thinking of applying for a position with a specific company, you may want to request a copy of your credit report before submitting your application. Depending on the nature of the position you’re applying for, this could be necessary as soon as the hiring company receives your resume in the mail. It’s also important to understand that credit checks don’t necessarily eliminate other types of hiring discretion, such as demonstrated abilities and references.
There are several different reasons
why hiring managers conduct credit checks. For example, some hiring managers conduct these background checks as part of a routine review of a potential employee’s financial and job history. The other reason why hiring managers may conduct credit checks is to eliminate applicants who may have credit accounts that aren’t current or that show a history of financial difficulties. Regardless of the reason, job applicants need to be aware of their rights when it comes to having their credit reports and other personal information examined by hiring companies.
As mentioned above, most hiring managers
will conduct credit checks to determine if an applicant will be a good fit for the job. Typically, the credit reports that most hiring managers review includes the following items: the individual’s driver’s license number, social security number, birth date, current address, current employment and salary history, current financial account details, and any recent bankruptcies. While some companies perform more thorough credit checks and require the individual to have a higher credit score to be eligible for the job, most hiring managers only base their decision on the credit history and score when evaluating an applicant’s application.
Although employers are not required to ask for proof of identity
when conducting credit checks, many still do choose to ask for some sort of identification. Some employers also prefer to request an original copy of the social security number rather than an updated or traditional credit report. The reason that most hiring managers request an original social security card is to ensure that the information on the card is correct and is not being used fraudulently. Another common reason for an employer to request a social security number is to avoid duplication of someone else’s card. For example, an employer may accidentally duplicate a credit card listed on someone else’s credit report, which would then show up on the individual’s credit report.
In addition to credit checks
several states limit employment inquiries based on race, religion, sexual orientation, age, national origin, and many other categories. Although these laws vary from state to state, job seekers need to be aware of these potential offenses and be prepared to explain to prospective employers why these facts are pertinent to their particular situation. While employment decisions are based on several factors, having a clean credit report and work history can make a big difference when it comes to helping to prove factual information provided by previous interviews.