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 candidate. 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 (SHRM) 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!

At ClearStar, we are committed to your success. An important part of your employment screening program involves compliance with various laws and regulations, which is why we are providing information regarding screening requirements in certain countries, region, etc. While we are happy to provide you with this information, it is your responsibility to comply with applicable laws and to understand how such information pertains to your employment screening program. The foregoing information is not offered as legal advice but is instead offered for informational purposes. ClearStar is not a law firm and does not offer legal advice and this communication does not form an attorney client relationship. The foregoing information is therefore not intended as a substitute for the legal advice of a lawyer knowledgeable of the user’s individual circumstances or to provide legal advice. ClearStar makes no assurances regarding the accuracy, completeness, or utility of the information contained in this publication. Legislative, regulatory and case law developments regularly impact on general research and this area is evolving rapidly. ClearStar expressly disclaim any warranties or responsibility or damages associated with or arising out of the information provided herein.