When individuals come in for a job interview, they are typically expecting to talk about their resumes, answer job-related questions and even submit to a criminal background check. However, many have never heard about a growing trend of many businesses to require credit checks before hiring. A credit check can help employers learn more about potential employees to make the best hiring decision.
Determine Credit Risk
Some employers in such fields as finance or law want to know an individual’s credit risk before hiring. Employers in these fields often believe that employees with a high credit risk, such as one with high credit card debt or a previous bankruptcy or foreclosure, may be at increased risk for financial stress, which could affect the company’s financial wellbeing,
according to Forbes. Companies like
PeopleFacts provide these types of credit checks for employers to help them minimize their hiring risks.
Understand Debt
The same Forbes study shows that individuals with high debt or those who have accounts in collections are at risk for several negative employee behaviors, including days absent on the job and poor work efficiency. These individuals also typically require more health care costs than their counterparts do. While outstanding debt does not mean that one cannot be hired, it may tell employers that they will need to place these employees in a company-sponsored financial wellness program for success.
Ensure Employee’s Identity
While employers often use other means to perform identity checks, a credit report from a trusted source can provide important identity information, such as the past addresses where one lived. This can aid in performing applicable criminal background checks. This is vital in such fields as law enforcement, national security and even some branches of the military.
Determine Personal Responsibility
Some employers use credit checks to help them understand what sort of person the potential employee is. While credit reports cannot describe a person’s exact character qualities, they can help employers understand if the person is reliable, trustworthy and responsible. This can help them understand how committed the person would be to a job.
Of course, potential employees are required by law to agree to a credit check before it is performed. However, they should know that if they do not agree to one or if the employer finds something negative on the report, they may be denied the job. Credit reports can show employers more than just a set of numbers; it can give them important clues as to how an individual makes decisions.
