Will a Bankruptcy Be Included in a Background Check?

When employers are looking at job applicants for open positions, they generally conduct background checks before extending an offer of employment. A background check can include verification of identity, work history, and education; a check of criminal records; and in some cases a credit report.

Why Some Employers Look at an Applicant’s Credit Report

An employer can look at a candidate’s credit history to assess his or her financial stability. Employers who are hiring candidates for positions that require working with money or obtaining a security clearance often look at credit reports. Some states have passed laws that prohibit employers from considering an applicant’s credit history when making employment decisions.

Job Applicants Who Have Declared Bankruptcy

Many people who have fallen on hard times and filed for bankruptcy are concerned that an employer might see that information in a background check and decide not to hire them because of it. Credit reporting agencies search public records. If the company requests a credit report on a job applicant who declared bankruptcy, the bankruptcy will appear. The Fair Credit Reporting Act does not allow bankruptcies more than 10 years old to be included in an employee background check.

Some employers only search criminal records and do not look at credit reports. They will therefore not see a bankruptcy.

What an Applicant Who Has Declared Bankruptcy Should Do

An employee who is concerned about an employer taking adverse action because of a bankruptcy may decide to be up front about it with the employer. The candidate can explain the circumstances that led to the bankruptcy. Many employers will understand if a candidate went through a job loss, divorce, or medical problem and got into debt and will still hire a candidate who declared bankruptcy but is otherwise qualified.

Contact DataCheck for Background Check Services

DataCheck conducts pre-employment background checks for employers across the United States. We can research and provide information on a candidate’s education, work history, criminal record, and credit report (if allowed in your state). This information can help you choose the right people for open positions. To learn more about our background check services, contact DataCheck today.