Consumer credit reports are legally permitted when conducted in compliance with federal and state laws and regulations; however, their use in employment decisions has steadily declined. An increased focus on privacy coupled with the economic challenges many have faced over the last several years has contributed to an environment where many argue an individual’s credit has limited impact on his/her qualifications for a specific job. Additionally, there are several jurisdictions –on the state and local level – that prohibit the use of credit information in employment decisions unless a specific exemption applies, and a few jurisdictions that require specific language on the disclosure and authorization form (such as California). Please contact your account manager for educational information regarding these laws.
A credit report can be an important indicator of financial responsibility for employees with fiduciary or cash handling responsibilities, access to expensive equipment, other people's property or otherwise placed in a position of financial trust.
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- Applicant Information – Name and Date of Birth, SSN
- Applicant AKA – Additional names that an applicant’s record might be filed under (maiden names, nicknames, etc.)
In this age of identity theft, consumers may have placed a “security freeze” on their credit history because of prior theft problems. This means that the consumer will have to contact the credit bureau and have the freeze temporarily “lifted” so a credit report may be obtained by the background screening company.
Consumer credit reports may include: current and previous debts, payment history, bankruptcy records, previous residency history, and current financial status. Credit reports for employment purposes do not include a credit score and are considered “soft” inquiries meaning there is no impact to an individual’s credit rating. To access credit history information, clients are also subject to additional requirements such as an onsite inspection and thorough vetting requirements. When conducting a credit check for employment purposes, we recommend evaluating if there is a clear relevancy between the credit information and the position’s duties and responsibilities. Further, we recommend consultation with qualified legal counsel for all employment law matters.
Click here to the sample report.