How Important is Credit History in a Background Check?
More and more employers are conducting background checks on their potential employees. This recent trend has seen a significant increase in the past few years. Employers want to know that their potential employees are capable of balancing their personal finances and their job responsibilities. It is the opinion of some employers that those with a negative credit history may be a threat of potential fraud or embezzlement that can jeopardize their company.
The Importance of a Credit History
Credit history is very important in a background check because it can potentially cost potential employees jobs. Background checks can provide employers with information about credit history, criminal records, driving record, and work history. Poor credit can deter employers from hiring highly qualified candidates.
Consider an example. Imagine two highly qualified candidates make it to the final round of the employment interview. The employer may have a hard time deciding on which person to hire since both are excellent candidates. The employer may elect to check credit history to decide which employee is the best fit for the position. If one candidate hast perfect credit and the other candidate has maxed out credit cards, liens, and charge offs, the employer may likely go with the candidate with the good credit as the new hire. This situation may seem harsh but it is a reality in this day in age.
Consider another example. Imagine being a top candidate for a position. The applicant may tell the conductor of the interview that he or she has worked for a particular employer in the past. The employer may decide to verify the information by conducting a background check. The employer may find that the information is correct after conducting the background check, and the employer may discover something else. The top candidate has a bankruptcy and several judgments on his or her credit. Suddenly the top candidate becomes less of a high candidate in the employer’s eyes. A bad credit history can cost a candidate the job.
Something to Consider About Credit History & Background Checks
By law, employers are required to get the consent of the applicant to conduct a background check. The Fair Credit Reporting Act (FCRA) requires that the employer notify the applicant in writing and have the written consent of the applicant before conducting a background check. The same rule applies when conducting inquiries. The employer must follow the same rule by asking for consent before conducting the inquiry.
It may be a good idea to disclose credit history issues before the employer conducts the background check. Not all employers may hold negative credit against an applicant. It may be possible to draw the employer’s attention away from the negative credit history and focus on the job qualifications that the applicant has. Disclosing the information up front may let the employer know that the candidate is honest and worthy of employment.
Background credit checks are a common part of the application process. Employers cannot conduct a background check on candidates or current employers without their consent. Honesty is always the best policy when it comes to employment.