FAQs About Employee Credit Checks

Jun 12, 2019
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Whether you’re looking for a job or considering hiring a new employee, credit histories matter. As an employee, you may feel that your credit history doesn’t have anything to do with your ability to do a job, but employers often feel differently. In fact, as time goes by, more and more employers run credit checks on potential employees.

Why do employers check these histories?

In many cases, employers want to identify whether an employee is likely to steal money or products. For example, business leaders from banks, credit cards, government, and other financial agencies use credit check services for employers to recognize signs of financial difficulties that may affect an employee’s honesty. These checks are often run by employers who are concerned about access to sensitive customer information or confidential product data. Sometimes, employers run checks before promoting employees.

What can employers see?

Depending on the services, and in some situations on the type of business the employer has, the credit check may show patterns of payments (either late or on time,) the extent of your debt, the amount of available credit, and evidence of poor financial management. Several of these could be used as indicators of financial skills. This is a lot of information, but there are some things not available to potential employers.

Is there anything employers can’t see?

The credit check may show your history or payments, how much debt you have, and how much available credit you have, but they don’t show personal information. For example, the reports don’t disclose your birthday or whether you’re married. It doesn’t give your credit score and doesn’t share any of your account numbers.

What about privacy concerns?

Whether you’re an employer or a hopeful employee, you may be concerned about the violation of privacy. Fortunately, there are rules governing access to this information. Employers must notify employees and obtain permission before checking credit. Generally, there must be a window of time for the employee to prepare for the check.

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