How much of my financial status appears on a background check?

It’s a dollars and cents deal.

Every financial decision we make adds up. But does our financial past matter when it comes to screening? And how much of that information shows up on a background check anyway?

For years, credit checks have been a routine part of most screenings. Performed only with permission from the job seeker, checks include reports from the three major credit agencies: Experian, TransUnion, and Equifax.

What information does a credit check include?

Here’s what usually turns up. In addition to the basics (name, address, previous addresses, and social security number), a credit check also includes information such as outstanding debts—mortgages, medical debt, or student loans, for example. The report also includes bankruptcies, credit limits, tax liens, and more. Credit agencies boil all this information down to develop a personal credit score that’s also part of most background checks.

What value do credit checks have?

Credit checks are considered a staple for employers because of the insight they offer about an applicant. Many businesses believe a credit rating can show if a person is responsible enough to handle the company credit card or manage cash within the business. The philosophy is: if the credit agencies consider this person a safe bet, a business could, too.

How big of a difference do credit checks make?

Even though stats from the Society for Human Resource Management say 47 percent of employers run credit checks, other experts say credit checks don’t have a big impact on an employers’ final decision. In fact, in some states credit checks can’t be considered at all. (Currently, 11 states and some cities have laws restricting the use of credit checks in employment background screening.) In some careers, it could matter, though. In the financial services industry, for example, an extremely poor credit report could influence an employer’s final decision.

Another element that influences background checks? Having the right screening partner. Want a partner with the latest technology and the most experience? Call ClearStar today!

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