Should Employers Use Credit Checks?

Nick Fishman

The New York Times recently published an interesting, albeit one-sided article on the use of employment credit checks.  The article seems to slant towards demonizing employers’ use of this background screening tool by highlighting cases where applicants have been denied employment.

There is another important side of the story.  And that is the fact that when used properly, these checks allow employers a snapshot into an applicant’s personal responsibility and to assess potential risks.

To be fair, a small part of the article addressed the other side and in my opinion began to create a compelling argument for the use of credit reports.

Business executives say that they have an obligation to be diligent and to protect themselves from employees who may be unreliable, unwise or too susceptible to temptation to steal, and that credit checks are a help.

“If I see too many negative things coming up on a credit check, it’s one of those things that raises a flag with me,” said Anita Orozco, director of human resources at Sonneborn, a petrochemical company based in Mahwah, N.J. She added that while bad credit alone would not be a reason to deny someone a job, it might reveal poor judgment.

“If you see a history of bad decision-making, you don’t want that decision-making overflowing into your organization,” she said.

We’re also pleased the our favorite labor and employment attorney, Pam Devata got a in an important point about applicant’s rights.

Federal law requires employers to get the consent of job applicants before running credit checks, said Pamela Q. Devata, a lawyer in the Chicago office of Seyfarth Shaw.

And if they are considering denying someone a job based on a check, she said, “they have to notify the applicant.” That is intended to give someone a chance to explain circumstances or spot erroneous information.

Read full article

For more information about pre-employment credit checks, check out an article we recently published on EmployeeScreen University, Credit Reports: A Window to the Soul?

Nick Fishman
Follow Me

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
Follow Me
Tweet
Share
Email
Share