The benefits of running a credit check on job applicants center on the protection of companies from financial mismanagement. TransUnion reports that one study found a job applicant with a troubled financial history was almost twice as likely to engage in theft as an applicant who lacked any financial history issues.
With concerns about rising rates of employee theft and fiduciary issues, more employers are conducting credit background checks on applicants for some positions. The financial information found in credit reports can offer insight into a candidate’s level of responsibility.
A credit check reveals credit history, including paying habits, judgments, liens, and bankruptcies and is useful in determining financial responsibility, money management, and the possibility of wage garnishment by state or federal tax authorities.
The vast majority of employers who conduct credit checks do so for jobs with fiduciary or financial responsibility, such as accounting, budgeting or those involving cash or sensitive credit card information. Many companies also consider the credit of candidates for senior executive positions.
The Society of Human Resource Management reported that 60 percent of employers check the credit of at least some job applicants to find details about personal finances including credit card debt, mortgages, car payments, student loans, payment history, and defaulted loans.
The federal Fair Credit Reporting Act gives employers the right to conduct background checks on current and potential employees through third-party companies, with the individual’s approval. Some 47% of employers say they check the credit history of applicants for certain positions, according to the Society for Human Resource Management. That’s up from just 25% in 1998.
DataCheck is a full-service background investigation company that includes credit checks in its services. DataCheck runs thorough background checks, including employment history, criminal record reports, Social Security number verification, driving record checks, and drug screening. Credit checks are performed upon request in complete compliance with the Fair Credit Reporting Act requirements.
Contact DataCheck toll-free at 800-253-3394 for more information about its job applicant investigation services, including credit checks.