Debunking Myths About Employment Credit Checks

Nick Fishman

Be still my heart.  For the second time in the last month, a member of the media has written a fair and balanced article on how employers use credit reports as part of the background screening process (see post on CNBC article).  This time, Erica Sandberg of the San Francisco chronicle writes about six misconceptions critics have about how they are used. Her timing is perfect as we reported earlier today that Maryland has joined Hawaii, Oregon, Illinois and Washington in enacting laws that severely restrict the use of credit reports.

I’ve included my four favorites here as well as my quick responses to these myths.  Of course, Erica did a much better job of explaining them and providing a better picture of what is really going on.  I strongly encourage you to read the full article.

  • Most Employers Pull All Applicant’s Reports– Not true.  See SHRM study which reveals that only 13% of employers indicated they run credit on all applicants.
  • Employers and Lenders Look for the Same Information– Not true.  Employers are not privy to a credit score or account numbers.
  • Poor Credit Will Immediately Disqualify You– Not true.  If employers only hired people with good credit, they’d hardly be able to hire anyone
  • Employers Use Credit Checks to Discriminate– Really? Does anyone actually believe this?  While Erica provides a better explanation than this, I refuse to dignify this notion with a response.
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