Use Credit Reports Wisely and Legally When Vetting Applicants

Posted by Kristina Taylor
July 22, 2011

Use Credit Reports Wisely and Legally When Vetting Applicants

There has been much controversy and buzz surrounding the use of credit reports during the process of conducting background checks for potential hires. Many job applicants are confused about what exactly their credit history has to do with their ability to perform a specified job. Others are wary of too many people knowing their credit score. Still others think that the pre-employment screening process of obtaining a credit report will lower their overall credit score.

Employers need to be clear about why they’re preparing to do a credit check, and they need to get the applicant’s permission to do so, according to the rules of the federal Fair Credit Reporting Act. If the results of the credit report adversely affect the employer’s decision to hire, the applicant is entitled to obtain a copy of their credit report and to challenge anything they see in it that they deem to be false.

Before conducting a credit report, or even asking for permission to do so, employers should ask themselves whether the information contained therein is really necessary for the applicant’s success in that particular job.

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