Is Bad Credit Really Costing You That Job? EmployeeScreenIQ Trends Survey Reveals All
April 21, 2014
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?
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?
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)