Background and Credit Check Reporting
CREDIT REPORTING FOR EMPLOYMENT:
Currently there are five states that have restrictions in place to prevent employers from using an applicant or employee’s credit history in making employment decisions. The reason why most employers use background or credit check reporting prior to or during employment is to ensure the company has financially sound employees representing their interests.
There is no harm in credit reporting however, consider this:
- As an employer, do you have a signed Consumer Credit Authorization to obtain credit history on your current or future employee?
- Does your particular state have legislation to control credit history verification?
- When you receive your report will you know how to interpret the information fairly?
At least fifteen other states have pending legislation to restrict employer’s use of credit information.
Checking your state for any restrictions is a great way to be on the safe side. Listed below are reasons why a credit report may be necessary for an employment credit check:
- Employee has access to client personal information
- Employee is able to transfer, issue or collect financial payment information
- Employee is a registered advisor or in a managerial position
- Employee is authorized to collect debts on behalf of employer
- Employer is a financial or Credit Union institution
Check out our website for Employee Screening under our HR & Compliance Solutions section. Find out what else you as an employer need to know under the Fair Credit Reporting Act (FCRA) by clicking here