Why Conduct Credit Check for Employees?
Hiring a wrong candidate can prove to be very costly for organizations. But, if the wrong hire is selected for a designation that requires financial responsibilities it can prove to be a perfect recipe for disaster. To avoid such a thing it is important for employers to scrutinize the credit history of candidates, particularly for roles that require working in management or money-handling position for those working in financial institutions where financial fraud is one of the primary risks faced by an organization. Since getting credit information of an individual is a highly sensitive thing it is important for an employer to hire a professional background screening vendor like cFirst that can protect the candidate and employee privacy thereby complying with different legal eligibility criteria.
Challenges in Conducting Credit Check
There has been a growing concern in the different US states and cities where conducting credit checks for employment has been widely contested throughout the United States. One particular law that requires employers to get consent from the candidates or employees before pulling out their credit report is Fair Credit Reporting Act (FCRA). There are certain times when this law prohibits employers from performing credit check report for employment purposes unless the candidate is applying for a specific position that requires money management.
At present there are 11 US states that place restrictions on an employer’s ability to use credit information for employment decisions. They are: