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Employment Credit Check

Employment Credit Check
An Employment Credit Check is a Credit Report prepared specifically for employers. An Employment Credit Report provides current and historical credit payment and balance information. It may contain information regarding delinquent accounts, accounts that have been sent to collection, maximum credit limits available, court judgments, bankruptcies, and liens. It may also provide a list of recent inquiries made about an individual's credit.

An Employment Credit Check is often referred to as a Credit Check for Employment. At times a Credit Report is erroneously called a Background Check or Background Verification, and sometimes a Background Check is erroneously called a Credit Check.
Why Do Employment Credit Checks
If an employee will have fiduciary responsibilities (such as handling company funds, having access to credit card information, or working as a financial officer), an Employment Credit Check is a critical element of a comprehensive background check. It provides an important look into the financial history of an individual, as well as the person’s current financial standing. It outlines habits and skills in financial management and reveals potential financial pressure.

Credit Reports also may provide name variation and address history for the individual. This information can be very useful when checking for a history of criminal records.

What are the Sources of an Employment Credit Check?
There are three major Credit Reporting Agencies. Employment Credit Reports are compiled separately by each of these three agencies. Organizations that issue credit to individuals are the original source of the credit history information compiled by the Credit Reporting Agencies.

What are the Weaknesses of Employment Credit Checks?
Employers must be cautious when using Employment Credit Reports in the hiring process. Employment Credit Reports can be incomplete. Not all credit, judgment, bankruptcy or lien information is supplied to the Credit Reporting Agencies (therefore the information is not available in the report). In addition, Employment Credit Reports are also subject to mistakes, which can change the nature of the reports. Employment Credit Reports can also be difficult to read (see Reading a Credit Report). Some states restrict the use of credit reports in the hiring process (see Restrictions On Use Of Credit Reports For "Employment Purposes").

How Long Do Employment Credit Checks Take?
Special approval must be obtained before a client can order Employment Credit Reports. Once approval has been obtained, Employment Credit Reports are usually available the same day an order is entered into our online tracking system. To protect the confidential nature of this information, Employment Credit Reports cannot be viewed online by our clients. The report must be faxed or mailed.

Can I See a Sample Employment Credit Check?
Yes, click Sample Employment Credit Report.

What is Our Recommendation for Employment Credit Checks?
We strongly recommend an Employment Credit Report for any potential employee who will have fiduciary responsibilities. It will outline habits and skills in financial management as well as potential financial pressure. Verify that your intended use of credit reports meets your state's requirements, if any apply (see Restrictions On Use Of Credit Reports For "Employment Purposes").

Restrictions on use of Credit Reports for "Employment Purposes"
Federal, state and local law regarding use of credit reports for employment purposes is rapidly evolving. Several states including: California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont and Washington restrict employer use of credit reports. See Other State and Local Laws and Regulations. It is the employer's responsibility to stay current with changing legal requirements. A Matter of Fact is not a law firm and cannot provide legal advice. It is important that employers work with counsel to develop an employment screening program specific to their needs. Employers should obtain legal advice concerning their legal responsibilities, and to ensure that background check documents, policies and procedures are in compliance with applicable local, state and federal laws and regulations. For more see Legal Disclaimer.

What if I Find Errors on My Credit Report?
If you find errors on your own credit report, you will need to contact the Credit Reporting Agencies directly. See Credit Bureau Contact Information.

Need Help Reading Credit Reports?
The following resources may help in reading a credit report:
Additional Resources

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