By financen | March 27, 2020 - 6:00 pm - Posted in Credit

The Importance of Checking Credit During the Hiring Process

An applicant might be dressed to impress, have extra copies of their resume ready and put on a winning smile. However, don’t let these be the determining factors in your hiring process. You should also check the applicant’s background to make sure their record is clean and free of misdemeanors and felonies. A credit check is also necessary because an applicant’s financial past can shed some light about how they’ll be as an employee. You can gain a good understanding of how applicants handle money, their decision-making abilities and their potential for criminal activity. Here’s how the credit check process works.

What You Can a nd Can’t Do With an Applicant’s Credit Information

By getting credit check services for employers, you can learn more about your applicants and further narrow down your list of candidates. However, you have to be careful with their information and respect their rights to privacy. For example, some states forbid employers from considering credit information in the hiring process. If you live in California, Connecticut or Maryland, you won’t be able to consider credit reports when making hiring decisions, according to the National Conference of State Legislatures (NCSL).

Consider Applicants’ Legal Rights

It’s important to notify an applicant if you intend to check their credit. Before going forward with the process, you must first receive their written permission. The Fair Credit Reporting Act asks employers to be “clear and conspicuous” when notifying applicants. The notice should not be mixed in with other language. If you plan to reject an applicant based on their credit score, you must let them know before you make the decision. This is called a pre-adverse action notice, which includes a copy of the applicant’s credit report used and a summary of their rights.

In some cases, checking an applicant’s credit is necessary. Just be sure to acknowledge their rights.

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