Why Employers Use Credit Reports in Employment Screening

using credit report for employment screening

Some employers and potential employees alike may wonder what the real value that doing a credit check has on potential employment.  For some, it almost seems like they are going too far or learning too much personal information when employment screening is done.  However, there really is value in seeing a credit report! Those things learned from a credit check include the following:

A History of Late Payments

A history of late payments might mean that a potential employee is too disorganized to pay their bills on time. Most employers don’t want someone who lacks the organizational skills to have jobs of importance in their organization.  Late payments could also indicate that someone doesn’t care if they live up to their agreements.

Signs of Financial Distress

People who have a lot of credit card debt on several different cards might be showing signs of financial distress. When potential employees take on a new credit card to pay off old credit card debt, they may see a job as a way to fraudulently attempt to get more money to pay that debt down.

If a person is applying for a job that includes handling money or working the books, financial stress in their personal lives can throw up a big red sign to an employer. Why entrust someone with your money if they cannot take care of their own?

Employment Screening Reveals Many Red Flags

Other things that employers can learn from a credit report that can throw up a red flag include:

  • Liens
  • Percent of credit utilization
  • Bankruptcy and foreclosures
  • Recent late fees

TruDiligence is Certified to Handle Your Employment Screening

For over 20 years, TruDiligence has been a full-service background check and investigative firm.  We specialize in FCRA compliant employment screening.  We strive to promote the interests of public safety and of our clients by providing fast, accurate, and comprehensive background checks—and yes, that often includes looking at a potential employee’s credit history. If you would need a background check for job candidates at your business, please contact us.

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