Due to the increased availability of background screening services, many employers turn to employee credit checks for current employees as well as new applicants. Some companies feel that responsibility in financial dealings is a key indicator of a valuable employee. They may obtain credit reports through credit bureaus, interviews of an applicant's business associates, or checking public records for evidence of bankruptcies.

Regulations for Employee Credit Checks

When considering credit records for employment purposes, strict rules must be followed. The employee or applicant should be given a pre-adverse action report along with a copy of the credit report and a summary of rights. He or she must be given a chance to review the information and dispute the accuracy of the findings before a final decision is made. Being consistent in criteria used for rejections is important. If any hired applicants have similar records to those of rejected applicants, complaints could be filed with the Equal Employment Opportunities Commission.

Credit problems often affect hiring decisions. If an employer receives 100 applications for a financial position, they may choose to eliminate those with poor credit histories. An applicant may be rejected for having a debt load too high for the proposed salary even though there is no history of late payments. Another example would be an applicant who is rejected for having little or no credit history to show proof of financial responsibility.

Employee credit checks are available online through background screening companies. A reputable website should be sensitive to privacy and security concerns. They should be in compliance with FCRA regulations and give instructions for using their information responsibly. Most often, they utilize large databases that are governed by appropriate restrictions.