CNBC Offers Balanced Article on Employment Credit Reports

Nick Fishman

Thank you CNBC.

Let’s face it.  Employment credit reports have been attacked on all sides for quite some time now; from the media to our legislators to the EEOC.  Many have misperceptions about how and when they are used as well as the information being reported. For instance, it is a falsely held assumption that employers have access to a credit score.  And, many have drawn their own false conclusions about a SHRM study that showed that 60% of employers include a credit check in the background screening process.   In fact, lost in that statistic is the fact that the study showed that while 60% of employers utilize credit reports, only 13% did so on all candidates.

With all of this negative and often misinformed or misleading information, it has been hard to find any media stories which properly portray the intended use and benefits of this product.   So imagine my surprise when I saw such an article on CNBC, “Can Bad Credit Still Cost You a Job?”

Kudos to reporter Cindy Perman for presenting a balanced argument with real facts.  I’ve included a few telling statements from the article below, but encourage you to read it in its entirety.  Hopefully, those that have been railing against the use of the important employment screening tool will take note.

How Much a Credit Report Weighs in the Hiring Decision

“I’ve always de-emphasized the credit report,” said Greg George, who does a lot of background checks and due diligence with his firm GTI Advisors. “People face various challenges in life from business failures and layoffs to medical bankruptcy and other issues that may cause/reflect financial distress. This does not mean that they are bad people or necessarily a risk.”

When A Credit Check is Used and What Information is Sought

Chris DesBarres, who owns Help Unlimited, a company that helps individuals, mostly senior citizens, manager their day-to-day finances, said he uses credit checks when making hiring decisions – but only after he’s decided he wants to hire someone.

When he does use credit checks, DesBarres said, he’s looking for four key things: The amount of debt the person is holding, any bankruptcies, recent red flags such as maxing out credit cards and any debts that are now in collection.

How Does the Recent State of Our Economy Factor

Jay Meschke, president of executive-search firm EFL Associates, said his clients have started to loosen their standards when it comes to credit checks — but not for everyone.

“Since the downturn in the economy and since people have been losing their jobs and being unemployed for long periods of time, hiring managers have lessened their historical standards vis a vis what the credit report might tell about a candidate,” he said, also citing Detroit as an example.

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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.
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