Employers Conducting Credit Checks?Feb 192021
We are aware that as part of any application for the extension of credit such as a loan or the subscription to a new utility service, the institution may conduct a credit check to determine our eligibility and credit risk. However, when applying for a job, being promoted, or seeking to serve on a board, we may be presented with the request to conduct a credit check or provide a credit report. In such an instance, there is not the typical request for extension of credit or subscription to a new service and, therefore, we may question the basis under which the employer or corporation will be seeking to investigate our credit.
There has been an increasing desire from employers and corporations, as part of their hiring or promotion process, to have a review of a credit report to determine whether to appoint board members or hire employees. Credit assessments are performed in addition to the other background checks done.
Credit checks will usually be required for posts involving high financial responsibility, access to funds, security or access to confidential or sensitive information. In those situations, there will be a concern of the risk of financial impropriety, bribery or other fraudulent activity which the companies are trying to avoid by assessing the likelihood of the person becoming susceptible to such. It is believed that credit checks can therefore mitigate against such risk of theft or embezzlement by assessing the person's financial stability and debt evidenced through their credit report. It is taken that a person in financial distress may be more susceptible to misappropriation of funds and therefore when such signs are evidenced by the credit report of a potential hiree, that person may not be considered the best fit for the company.
Credit checks would usually require consent and therefore that request to conduct a credit check can be met with a refusal, but that refusal may also result in a denial of the job. Hence, the refusal of a request to conduct a credit check may be tough especially since credit checks are usually conducted after successful interviews. This, therefore, means that the candidate is usually shortlisted to be hired. Hence, if you know you are seeking a security post or where managing finances and/or having access to funds are a key component of the job description, consider being proactive and review your credit report ahead of time and correct any inaccurate information that may be present.