Checking Credit Reports
If an applicant is going to be handling large sums of money or exercising
financial discretion at your business, you may want to run a credit check.
Unless you're worried about the applicant stealing money or expensive equipment,
a credit check probably won't be necessary. There are a lot of federal
restrictions on credit reports, so doing them can be more trouble than it's
What's in a credit report? A credit report will include the following
information about the applicant:
- Social Security number
- tax liens
- child support obligations
- the names of other employers who have checked the applicant's credit
What's not in a credit report? Credit reports do not provide
- previous income
- college background
- bank accounts
- personal investments
- criminal history
- medical history
There are a number of things to consider if you decide to run a credit check.
- You will have to pay the credit agency for the credit report. The fee can
range anywhere from $25 to $50 or more for one report.
law on credit reports : there is federal legislation that governs the
use and disclosure of credit information. You must follow the law if you're
going to run a credit check.
laws on credit checks : A number of states currently have laws on the
books that require employers to provide notice and/or copies of credit
checks whenever they're used for employment-related decisions.
laws also apply : you can also get in trouble with antidiscrimination
laws if you can't show a business reason for the credit check if screening
on that basis has a disproportionate impact on minorities.