Reasons for Background (and Credit) Checks

It seems that background checks for all types of employment, from blue-collar occupations like construction and manual labor to white collar executive office jobs, require employees to submit to a background check. More often over the years, a credit check has been creeping its way into being part of a basic background check. Why? Many employers, particularly in the financial sector, see having good credit and good personal finance habits as correlating with strong job performance and responsibility. While in the financial sector, particularly for executive-level jobs, this makes sense. Even an investment advisor’s secretary may have to handle money at some point, and even a basic background check could make sense in this case.

But with the current economy, how much sense does it make? An article about why employers do both credit and background checks on their employees explains it. Background and credit checks, as explained in the article, are often done because of resume fraud. Some, for example, lie about the type of degree they earned, budging a BS to a Master of Science degree or are dishonest about employment start and end dates to cover large gaps of unemployment. As a result, employers need to verify all information on the resume and said in the interview, and the only way that can be done is through a background check.

Credit checks, on the other hand, are sometimes considered invasive by candidates, especially for occupations not in the financial field. After all, when a person has poor credit due to months of unemployment, which is often the case in this past recession, shouldn’t he or she be exempt because of his or her situation? In some cases, an employer may exempt a person with poor credit for employment, if that person has a detailed reason. As explained in the article, this should be mentioned before the person’s credit is checked in a background check. After, as explained in earlier posts, the person getting his or her credit checked has a right to see the report, as per the Fair Credit Reporting Act.