An increasing number of employers are using credit reports as an evaluation tool during the application process. A 2006 study found that 35% of companies surveyed use credit checks in pre-employment screenings, up from 19% in 1996. According to the 2003 National Retail Security Survey, conducted by the University of Florida, 41% of retailers used pre-screening credit checks and another 10% of retailers planned to start.
Employers say that a credit check can help them evaluate whether an employee will be honest, responsible, and accountable on the job. But to what extent does credit history predict job performance or a penchant for stealing or other negative habits? Moreover, employers may not take the time to assess what is behind a poor credit history. Learn the facts about employers and credit and the rights of the applicant.
Highlighted Articles and Research
Equifax no longer selling credit reports for employment screening
By John Ulzheimer, Credit.com
Did you know? Credit scores are not usually included with credit reports for employment screening. They are not designed to predict employee quality or employee performance.
As of fall 2009, Equifax no longer sells credit reports for employment screening purposes. Employers using credit reports have been a controversial topic particularly in light of the changing economy. The practice is considered unfair to some consumers with credit challenges that were beyond their control (e.g. layoffs or death in family). Read more>>
By Evangeline Mitchell
Did you know? 52% of adults nationwide believe that it is illegal for employers to pull credit reports. It is not.
This article summarizes when and why employers pull credit reports and offers commentary on this controversial topic. Read more >>
By Ben Arnoldy, The Christian Science Monitor
Did you know? In 2003, 35% of employers were checking applicants' credit.
More than ever before, employers are checking applicants' credit reports when hiring. Civil rights, minority, and privacy advocates are seeing this as an issue of discrimination. Minorities are more likely to have worse credit but this has not shown to affect job performance. A lawsuit by an employee of Johnson and Johnson Co., in which they didn't hire due to credit, changed how Johnson and Johnson use credit in hiring practices. While there is not a specific law barring employers from pulling credit, could this be in the future? Read more>>
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