How Credit Checks Protect Employers

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When applying for a job, many candidates focus on polishing up their resume, finding the perfect suit and practicing typical interview questions. What they don’t realize is that their credit history may play a crucial role in whether they get hired or not. Many businesses include this as part of their hiring background check because it provides insight into employee responsibility.

How Credit Checks Protect Employers

What Roles Require a Credit Check?

Positions that deal with finances are the most likely to require this type of verification. Credit check services for employers are recommended for roles at banks, accounting firms, financial advising institutions and retail stores. They are suggested for all levels in a company, from the top chief financial officer role to an entry-level salesclerk.

What Do Credit Checks Show Employers?

Credit history checks help employers evaluate not only the financial health and responsibility of a candidate but also the person’s work history. An employer will look for a consistent record of employment and will question any breaks they see. They will also look at balances and on-time payment history. This type of information helps a business decide whether a candidate is susceptible to financial crimes such as bribery or embezzlement.

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What Are the Limits to a Credit Check?

Although federal laws allow for this type of background check, some states place limits or restrict the practice altogether. California, Maryland, Illinois, New York and Washington have enacted restrictions. The Fair Credit Reporting Act requires that employees give written consent for a business to run a credit check. A company must provide a copy of the credit report when rejecting a candidate, allowing the person to check for errors and disputing inconsistencies.

Employers benefit when they dig into the credit history of potential employees. These background checks provide a snapshot of a candidate’s business acumen and level of responsibility. This type of information allows a company to make the best hiring decision and create the most beneficial workforce.

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