Employment Screening and Credit Reports

There are many employers that obtain an individual’s credit report as part of the employment screening process, while many others do not.

There have been several attempts at both the state and national levels to prohibit an employer from using the credit report of an applicant or employee for employment purposes. The most recent is HR 3149, the Equal Employment for All Act, sponsored by Representative Steve Cohen (D-TN).

As of today, the FCRA allows the procurement of a consumer report, including a credit report, as permissible for employment purposes.

Employers and businesses generally maintain that a credit report is useful in screening applicants for certain sensitive positions, those that have responsibility for cash or assets. The report is considered only as part of a comprehensive background screening process that includes verification of employment, education, criminal history, identity, reference checks, and interviews, among other factors. Employers feel that they can legitimately use this information to make the best possible choice among candidates.

What is the value of an individual’s credit report for an employer?

Since there is no lending involved, a credit score is not provided on an report for employment purposes, and therefore has no effect on the decision to hire. What is included may determine if the applicant has excessive debt, pays bill responsibly, has debts in collection, or has an extravagant lifestyle based on overuse of credit cards. The employer may consider the amount of pressure that may be put on a potential employer by collectors as a factor, or whether the applicant has shown good judgment in his own financial dealings.

The wise employer will consider extenuating circumstances in assessing the credit report of an applicant. Certainly today’s economy and unexpected job loss are factors to consider, as well as unavoidable medical bills which can have a tendency to pile up, even on those who have medical insurance.

For more information go to: Employment Screening

What Is A Background Check

Wikipedia defines background check or background investigation as the following: “A background check or background investigation is the process of looking up and compiling criminal records, commercial records and financial records (in certain instances such as employment screening) of an individual.”

Before you hire, be sure to do your homework on the candidate with a thorough background check or pre-employment screening.   You can learn about how the candidate manages their finances, what their driving record and criminal history all have to say about the individual.

Pre-employment screening has become much more sophisticated, efficient and effective with the use of online tools.  You can obtain your pre-employment screening/ background check by contacting Loss Prevention Systems, Inc. your Background Check Experts at 1-770-426-0547.