Should You Check Job Applicants’ Credit?

Companies that want to hire new employees generally conduct background checks on candidates. A background check can uncover important information, such as a criminal record and possibly inaccurate information on previous employment or education that was included on a resume.

Employers often conduct a credit check on job applicants. While many people believe that a job applicant’s personal finances should not be a factor in the decision on whether or not to extend an offer of employment, in some cases employers believe it is prudent to check an applicant’s credit.

Why Some Employers Check Applicants’ Credit Histories

Employers usually conduct credit checks to reduce the risk of employee theft. The reasoning is that if a person is struggling financially, he or she may be tempted to steal money from a cash register, credit card information, or products from a store or to embezzle funds from the company or from clients’ accounts.

Can an Employer See an Applicant’s Credit Score?

The credit report that employers when someone applies for a job see is different from the credit report that lenders see when a person applies for a line of credit. The employer version of a credit report does not include a person’s year of birth, account numbers, or credit score.

Many Job Applicants Worry about Credit Checks

Job applicants, especially those who have gone through a period of unemployment and struggled financially, often worry that a derogatory mark on their credit report could cost them a job. However, many employers are understanding and will overlook financial problems if the applicant had a valid reason, such as unemployment or an illness, and if the person is otherwise qualified.

Laws on Credit Checks Are Changing

Many people believe that checking job applicants’ credit is discriminatory. They believe that information on a job applicant’s personal finances is irrelevant and that a person who is struggling financially should not be denied a job that could help him or her get out of debt. Several states and cities have passed laws to prohibit the practice in most circumstances.

How to Conduct Background Checks on Job Applicants

If you are planning to hire a new employee for a position that includes handling money, credit card information, or valuable equipment or inventory, it may be a good idea to obtain a credit report on applicants before extending an offer of employment if it is permitted in your area. Identifying people who have a lot of debt and are irresponsible may help you avoid hiring employees who steal or misappropriate funds belonging to the company or clients.

DataCheck can conduct thorough background checks on job applicants so you can make the right hiring decisions. This can include a check of many aspects of a person’s background, including criminal records, employment, education, and possibly credit. We will comply with all federal, state, and local laws. Contact DataCheck today to learn more.

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