Employment Screening

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Credit Report

A Credit report that is used for employment background check purposes is not the same as a standard credit report. In short, this type of check takes place when a potential employer checks the credit history to see how an applicant handled debt in the past. The reason for this report is to aid in fact checking for your potential hire. This will furthermore help you to have all of the information available before bringing an employee into your business. 

How Does an Employment Credit Report Work?

Firstly, the information is received through an online connection with a National Credit Bureau. After this is done, the credit bureau will the verify the Social Security information through the data collected on the applicant. A Social Security Number Trace will specifically look at the histories of:

  • Bankruptcies
  • Judgments
  • Foreclosures
  • Collection items
  • Minimum and maximum range of credit reported from the credit accounts the person holds.

Why Should a Company Run a Credit Report?

It’s normal practice for a business to credit check a variety of their employees. Some employers utilize a credit deep dive, not only to verify that an applicant is responsible and reliable, but also to confirm credit history.  A Social Security Number Trace provides the opportunity to cross check names as well as previous residential history in the job application for possible inconsistencies. By looking up a social security history, it is more difficult for a candidate to hide their possible criminal history and identity.

The Legal Breakdown

The Fair Credit Report Act (FCRA) states that certain account information must be removed from the employee’s background check credit report before it can be used. This is to protect the personal financial information of the applicant. Due to this being a more in depth scope, there are a few rules that are in place such as:

  • The employer must have written permission to do this type of background check.
  • There are laws that protect bankruptcy information.
  • The potential hire must also receive a copy of the consumer report used to make the final decision. They are then allowed to explain or dispute any information.

Background Search CheckmarkThe Key Takeaways

  • An employment credit report is when potential employer checks the credit history to see how an applicant has handled debt in the past.
  • The check itself will require your social security number, name, and address.
  • Employment credit checks are purely for educational purposes and cannot be used in against you in a hiring decision. 
  • An employer must determine that there is a sound business reason to obtain this type of check in the first place.

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