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People Who Work for You Recruiting and Hiring How Do You Do a Background Check? Checking Credit Reports
People Who Work for You Recruiting and Hiring How Do You Do a Background Check? Checking Credit Reports
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If an applicant is going to be handling large sums of money or exercising financial discretion at your business, you may want to run a credit check. Unless you're worried about the applicant stealing money or expensive equipment, a credit check probably won't be necessary. There are a lot of federal restrictions on credit reports, so doing them can be more trouble than it's worth.
What's in a credit report? A credit report will include the following information about the applicant:
- address
- Social Security number
- bankruptcies
- tax liens
- judgments
- child support obligations
- loans
- the names of other employers who have checked the applicant's credit
What's not in a credit report? Credit reports do not provide information on:
- previous income
- college background
- bank accounts
- personal investments
- criminal history
- medical history
There are a number of things to consider if you decide to run a credit check.
- You will have to pay the credit agency for the credit report. The fee may vary.
- Federal law on credit reports : there is federal legislation that governs the use and disclosure of credit information. You must follow the law if you're going to run a credit check.
- State laws on credit checks : A number of states currently have laws on the books that require employers to provide notice and/or copies of credit checks whenever they're used for employment-related decisions.
- Antidiscrimination laws also apply : you can also get in trouble with antidiscrimination laws if you can't show a business reason for the credit check if screening on that basis has a disproportionate impact on minorities.
