Balancing Credit Checks with Due Diligence

As global worksites become the norm, compliance and regulations tighten, and due diligence in hiring continues to challenge human resources professionals, businesses of all sizes will find it imperative to complete criminal background checks, credit checks, and employment screenings to evaluate job applicants thoroughly.

Credit Checks as a Pre-Employment Screening Tool


The Dē article, “Employment Credit Checks: The Case for Requiring Employers to Use More Accurate and Fair Assessments,” offers this information:

  • 60% of firms use employment credit checks for at least some positions (2010 SHRM survey)
  • 25% of unemployed people from low- and middle-income households with credit card debt have been asked to submit to a credit check as part of a job application (2012 Dēmos survey)
  • 25% of U.S. consumers (nearly 43.4 million people) had poor credit

While credit checks have become a normal part of the pre-employment screening process, it is important that employers put together an effective due diligence process and obtain appropriate authorization when screening applicants for employment.

Employers Should Use Credit Checks Wisely

Employers generally use credit checks as a means to prevent financial crimes such as embezzlement, especially in positions that are financial in nature.

However, while credit checks are a viable method for determining someone’s ability to repay past credit, employers should not automatically assume that just because someone has fallen behind on their bills they are more likely to commit a crime.


Over 13 million Americans lost their job during the most recent recession, according to the Bureau of Labor Statistics. Poor credit is not necessarily a sign of a weak character or poor employee choice, but rather a sign of the times. Therefore, it is important to balance credit checks with other background information before determining the suitability of a candidate for employment.


In addition to utilizing credit checks to determine whether an employee is likely to perform well and to prevent theft on the job, employers should also employ:

  • Effective interviewing techniques
  • Tests to assess job-relevant competencies
  • A system of internal checks and balances to detect and prevent financial crimes

Comprehensive due diligence is critical to mitigating risk for your organization. That’s where we can help. We are a full service background check and investigative firm with over 20 years of expertise. Contact us today for assistance with your background check, investigative screening, and verification service needs.

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