Employment background checks, especially credit checks, have begun to replace employer references as a way for hiring managers to investigate candidate suitability.
Employers who use background checks pay extra to get your credit score, but they do so to see payment history, debt load, bankruptcies and liens. Although their accuracy and ability to predict behavior remain a debated topic, background and credit checks serve five key purposes for employers.
Here are five purposes employers carry out employment background check:
5.) Legal Requirement
Employers may check credit scores to comply with legislation requiring them to conduct background investigations that include a credit check. For example, Title 5 Code of Federal Regulations Part 731 (5 CFR 731) and several executive orders require federal agencies to do background and credit checks on employees and government contractors. Brokers must report any personal bankruptcies to comply with financial industry regulatory authority regulations. Credit checks allow employers to confirm their reports.
However, getting access is not that easy, because access to your credit report is governed by the Fair Credit Reporting Act (FCRA), which sets the limitations on when and who can get access to your credit information. The FCRA sets a few restrictions specifically on employers who are using credit reports to screen new job applicants.
First, before checking your credit report, the employer must seek your permission. This implies that without your consent, there will be no access to your information.
Before you decide not to grant permission, it will be best to consider what your refusal would imply to a possible employer.
Also, if the potential employer decides against hiring you based on your credit report, the employer must provide you a copy of the report for you to review yourself before making any decision or even denying you the employment opportunity. This measure gives the applicant a chance to address and correct those errors.
READ MORE: What does a background check show?