Many employers run credit checks on potential employees, particularly if the job involves financial responsibilities. They make the assumption that if you handle your finances well, you will most likely be able to handle theirs. The credit check services for employers also provide information on your identity and level of personal responsibility.
Unlike when you borrow money from a bank or apply for a credit card, a pre-employment credit check does not include your credit score. Instead, it looks at account balances, payment habits and any liabilities such as judgments, liens or bankruptcy filings. Reports from credit check services for employers give an overview of your financial behavior.
Some employers also use credit checks to make sure you are who you say you are. In order for an employer to run a credit check, you must provide your name and any previous names you have used, your current as well as any former addresses and your social security number. The report will not include any of your account numbers, the year you were born or any information about your spouse.
Proof of Character
Probably the most important reason that employers run background or credit checks on job applicants is to get some idea of the person’s character. If this person has paid their bills on time and doesn’t have foreclosures, bankruptcies or judgments against them, employers are often will to take a chance and give this person the job. The assumption is that if you demonstrate financial responsibility, you are likely to be responsible and trustworthy in other aspects of your life as well.
It is becoming increasingly common for employers to run a credit check on potential employees, especially if the job includes handling money. This also allows the employer to double check on an employee’s indentity and make assumptions about their personal integrity. It is also better for businesses to have employee retention strategy.