Is Bad Credit Really Costing You That Job? EmployeeScreenIQ Trends Survey Reveals All

Nick Fishman

Employment Credit Checks

Nearly 600 human resources professionals opened up to EmployeeScreenIQ about how they use employment background checks to make hiring decisions and their candid feedback is detailed in our just-released, fifth annual survey of U.S. based employers. The new report looks at how companies manage the process of employment screening, their practices concerning Fair Credit Reporting Act (FCRA), Equal Opportunity Employment Commission (EEOC) guidance, candidates’ self-disclosure of criminal records and how they address adverse findings.

In the past few years, the EmployeeScreenIQ Trends Survey has become a benchmark many employers use to evaluate their background screening policies and practices. This year’s survey provides a unique cross-section of opinions and insights from an assortment of organizations and is a must-read for HR professionals that want to learn about what their industry peers are doing.

Today, we’d like to analyze one of our top findings: Does your organization utilize employment credit reports in your hiring process?

Employment Credit Reports

 

More than half of all respondents indicated that they do not use credit reports as part of their hiring process, and only 14% say that they always use credit reports. These findings are notable because they fly in the face of “common wisdom” as well as quite a few media reports, which hold that employers everywhere commonly use credit reports when looking into the backgrounds of job candidates. Obviously, this is not the case.

We then followed up and asked those who utilize employment credit reports:  What percentage of candidates do you estimate are denied employment based on the results of credit reports?

Employment Credit Reports

 

Of the respondents who do utilize credit reports as a hiring tool, a combined 79% frequently do not deny employment to candidates because of these checks. Again, this may fly in the face of conventional wisdom. Only 4% of respondents said that they deny employment 20% of the time or more based on credit reports.

If you currently use of are considering the use of employment credit reports, we have some advice for you:

    • Download EmployeeScreenIQ’s latest article HR’s Guide to Employment Credit Reports.
    • Consider whether there are particular state or federal laws that mandate your use of a credit report.
    • Make sure that you can demonstrate why a job candidate’s credit history might have a bearing on the job they are being considered for.
    • Find out if your state has laws that restrict employers’ use of credit reports and if so, what exemptions might apply (view our state by state guide)




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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