Justin Den asked:
Pre-employment screening is becoming an important part of the hiring process. Pre-employment screening encompasses a variety of background screening products such as criminal checks, education and employment verifications and credit checks. While not all employers choose to run credit reports on applicants, there are some positions with high security requirements that make checking a potential employee credit report a smart idea, however do so with caution.
A credit report is a very private document, as it contains information on how an individual spends his or her money. It will be required that your applicant provides you with consent before you are able to pull their credit report. As an employer if you decide to run a credit report on an applicant it is important that the position legitimately requires this type of information to determine if the applicant is a good fit for the job. For example if you are hiring a sales person who will be provided their own credit card to pay for business trips, it might be important to see if this individual is responsible with their own credit cards before providing them with a company card. It would not be fair to run an applicant’s credit report for an entry level position conducting data entry.
When you receive the results of the credit report it is important to look at the big picture. You may want to look at the individual’s debts and compare them to the projected salary for the position. Would this person be able to pay their current debts under this salary? Take a look at the individual’s total monthly payments. You will also want to consider any negative entries such as late payments or collections. If you see bankruptcies listed on the credit report proceed with caution. There are state restrictions where employers cannot use bankruptcy information in a hiring decision.
Once reviewing the credit report, if you should decide to decline the applicant based on information found in the credit report there are a few steps you must take to be in compliance with the FCRA. The applicant has a right to be provided a copy of the credit report for review along with an adverse action letter with information on why the decision was made. At this time they can dispute anything that is on the report and the employer must provide them with the time to do so. If a dispute results in any changes to the report the employer must review the report again with a fresh set of eyes.
In some cases using information contained in a credit report can provide relevant insight into whether an individual is a good fit for a position. In other cases a credit report is not an appropriate means of a background check. Information contained in credit reports must be used with caution and employers must be sure to follow the FCRA regulations to stay in compliance when using credit reports as well as any other background screening tools.
June
Pre-employment screening is becoming an important part of the hiring process. Pre-employment screening encompasses a variety of background screening products such as criminal checks, education and employment verifications and credit checks. While not all employers choose to run credit reports on applicants, there are some positions with high security requirements that make checking a potential employee credit report a smart idea, however do so with caution.
A credit report is a very private document, as it contains information on how an individual spends his or her money. It will be required that your applicant provides you with consent before you are able to pull their credit report. As an employer if you decide to run a credit report on an applicant it is important that the position legitimately requires this type of information to determine if the applicant is a good fit for the job. For example if you are hiring a sales person who will be provided their own credit card to pay for business trips, it might be important to see if this individual is responsible with their own credit cards before providing them with a company card. It would not be fair to run an applicant’s credit report for an entry level position conducting data entry.
When you receive the results of the credit report it is important to look at the big picture. You may want to look at the individual’s debts and compare them to the projected salary for the position. Would this person be able to pay their current debts under this salary? Take a look at the individual’s total monthly payments. You will also want to consider any negative entries such as late payments or collections. If you see bankruptcies listed on the credit report proceed with caution. There are state restrictions where employers cannot use bankruptcy information in a hiring decision.
Once reviewing the credit report, if you should decide to decline the applicant based on information found in the credit report there are a few steps you must take to be in compliance with the FCRA. The applicant has a right to be provided a copy of the credit report for review along with an adverse action letter with information on why the decision was made. At this time they can dispute anything that is on the report and the employer must provide them with the time to do so. If a dispute results in any changes to the report the employer must review the report again with a fresh set of eyes.
In some cases using information contained in a credit report can provide relevant insight into whether an individual is a good fit for a position. In other cases a credit report is not an appropriate means of a background check. Information contained in credit reports must be used with caution and employers must be sure to follow the FCRA regulations to stay in compliance when using credit reports as well as any other background screening tools.
June