Things to know before running credit checks during pre-employment background screening

Info On Credit Reports ImageIt’s not uncommon for employers to run credit checks on candidates during pre-employment background screening, especially if the candidate is applying for a position in which he or she would be trusted with the company’s financial records or in charge of managing funds. The point of conducting credit checks versus any other types of background checks is that employers can determine if a candidate would be good at managing the company’s money based on how they manage their own. Not all candidates may understand what undergoing a credit check will entail when they agree to one. Here are some things you should know about the process. You can’t check a candidate’s credit without their permission. You must have the person’s permission in writing, whether it’s as part of a job application or a separate document requested before pre-employment background screening later on in the process. Checking the report will not affect a candidate’s credit score. Individuals are not able to check their own credit reports more than once per year without it aversely affecting their credit score. However, during pre-employment background screening, companies request different reports than those requested by individuals. Checking someone’s report will not ding his or her score. The report doesn’t include information that can be used to discriminate. Credit reports do not contain birth dates or spousal information. They do not include account numbers for any banking institution. They do not contain the actual credit score of the candidate. The report does include a historical overview. Credit reports DO include legal names a candidate has gone by, including maiden or married names. It will include information about their credit history, including the ability to make payments on time and whether or not the candidate has ever filed for bankruptcy. It also may include a candidate’s previous employers, and current or past addresses. The report may contain errors. If the candidate has not checked his or her own credit report, there may be mistakes on it that have been overlooked, especially in the case of identity theft during the previous year. If you notice anything that doesn’t make sense with the rest of the report, give the candidate the chance to explain the problem before continuing the pre-employment background screening. To see a Fair Credit Reporting Act definition, check out the FCRA report. For more information about conducting credit checks on potential employees, contact Mind Your Business today. Image courtesy of Ambro /]]>

You May Also Like

Check out these additional posts from Mind Your Business.

Choosing the Right Background Check Provider for Continuous Background Checks

With continuous background checks, the importance of selecting the right provider cannot be overstated. The decision to integrate continuous monitoring into an organization’s processes comes with the responsibility of choosing a background check provider that aligns seamlessly with the unique needs and values of the organization. Let’s explore the key considerations in selecting the ideal…
Read More

What are Continuous Background Checks?

Continuous background checks are a departure from traditional screening practices and are a paradigm shift in how companies vet their employees. Unlike the conventional one-and-done approach, continuous background checks involve regular, ongoing assessments of an individual’s criminal history and qualifications. Continuous background checks can be used at varying frequencies, ranging from daily to weekly or…
Read More

The Top Five Reasons to Run a Background Check

Running a background check is more than just a precaution; it’s a crucial step toward ensuring transparency, accountability, and peace of mind. Let’s explore why running various types of background checks is essential in various aspects of life.  Hiring the Right Candidates In the hiring process, running a background check is a cornerstone of pre-employment…
Read More

Quality and Precise Results, On Time!

Let us know about your screening needs to get a custom quote. We work with businesses big and small as well as the government. Which means we have a package of solutions for your organization as well.