Think You’re Cut Out For Doing Employment Credit Reports?

Nick Fishman

HR's Guide to Employment Credit Reports

What’s in a credit report? Credit reports are not routinely used in pre-employment screening. In fact, our most recent survey revealed that only 12% of employers use them regularly. However, employment credit reports can be valuable to hiring managers as a part of the employment background check process because they can offer insight into an applicant’s reliability and offer clues about a person’s sense of personal responsibility. An employment credit report might include derogatory credit information, public record filings (bankruptcies, liens and judgments), account standing with creditors, and other clues like previous address history.

Credit reports also allow employers to quickly verify and expand on information they receive from applicants. They can reveal additional information that may prompt further review of the applicant and their past. They also provide credit information that would not otherwise be shared by applicants but may have an impact on job performance.  These reports are especially useful for companies whose candidates will have check-writing privileges or other access to company funds.

But, before you jump into the fray and start screening for credit, read our article, HR’s Guide to Employment Credit Reports for some key considerations, such as:

  • Which positions might necessitate use of an employment credit report
  • An examination of the growing trend of state law restrictions on the use of credit reports
  • Pending federal legislation designed to curb the use of credit reports
  • How to determine if credit reports are right for your company

Given all of the existing limitations, companies need to weigh their options carefully when it comes to pre-employment credit. Not only are there legislative limits on the use of credit, but adding to the mix, the Equal Employment Opportunity Commission (EEOC) and the trial bar are aggressively pursuing class action lawsuits in situations where they claim that the use of credit reports leads to race discrimination. Because of the uptick in cases involving credit, the increase in legislative initiatives, and the high cost of litigation, you should do some preventive risk analysis to determine whether credit reports are right for your organization.

Download our guide to help determine if credit reports are right for you.

 

Nick Fishman
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Nick Fishman

Nick Fishman is the co-founder of EmployeeScreenIQ, a leading, global employment background screening provider, and serves as the company’s executive vice president and chief marketing officer. He pioneered the creation of EmployeeScreen University, the #1 educational resource on employment background checks for human resources, security and risk management professionals. A recognized industry expert, Nick is a frequent author, presenter and contributor to the news media. Nick is also a licensed private investigator in the states of Ohio and Texas.
Nick Fishman
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