Six Myths About Using Credit Reports For Employment Screening

Finally we’re getting some factual reporting on the use of credit checks for employee screening.  Erica Sandberg, a Personal Finance Expert / Reporter, wrote an excellent article “6 myths about employer credit checks“.

Here’s a recap:

Myth No. 1: Most employers pull all applicant’s reports.

• Truth: Few do, and usually for specific reasons.

Myth No. 2: Employers and lenders look for the same information.

• Truth: Employers take a longer view on your credit past.

Myth No. 3: Poor credit will immediately disqualify you.

• Truth: Your checkered credit history may be ignored.

Myth No. 4: Employers use credit checks to discriminate.

• Truth: Employers pull reports to protect themselves.

Myth No. 5: All negative information is bad.

• Truth: Some credit report information is more alarming than others.

Myth No. 6: Employers don’t care about your reasons for having bad credit.

• Truth: They care a lot.

Read the entire article here.

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How To Use Credit Reports For Employment Background Checks

Maryland joins Hawaii, Washington, Oregon and Illinois as states that recently passed laws regulating the use of credit history-related information by employers for employment purposes. The Maryland law restricts the use of credit reports and credit history information unless specified conditions are met.

Employment Practices Solutions, Inc. (EPS), a human resources consulting organization, offers the following tips for employers in an article titled:

To Check or Not to Check: The Pros and Cons of Using Credit Reports in the Hiring Process

If an employer currently uses, or is contemplating the use of, credit histories to evaluate applicants, they should consider the following:

1. Is there a clear policy or practice regarding what positions will include a consideration of credit histories?
2. Are they used consistently for all applicants to those positions?
3. Is there a sound business reason to use the credit information for each of the positions that they are reviewing it for? That is, is it job-related? (i.e., will the position require the handling of money or assets, making fiduciary decisions, access to trade secrets or confidential information?)
4. Are there any applicable laws in the states in which they have employees? If so, is the employer considered a “covered employer” and are their current policies and practices consistent with such laws?
5. Are they getting the credit information from a reliable source?
6. Does the credit information have a record of reliability?
7. Have their HR professionals and/or hiring managers been trained in how to use and/or interpret credit reports?
8. Are applicants being given the opportunity to review and respond to the information contained in the credit reports or are all applicants with a weak credit record screened out?
9. Is the credit history used as a deciding factor between applicants with equal qualifications?
10. At what point in the selection process is it being used?

Related Posts:

• How Credit Checks Affect The Decision To Hire - A poll by SHRM  provides an up-to-date look at the impact of credit checks on the decision to hire. It looks at factors that have the most impact on hiring decisions, the reasons that organizations conduct credit checks, the types of job candidates most likely to be subject to credit checks and more.
• Don’t Ban Pre-Employment Credit Checks - Evil HR Lady (Suzanne Lucas) offers some common-sense advice for employers on how to properly use credit reports.

Photo credit: shawnzrossi

Lying On Your Resume Is Not Good For Your Career

Another highly visible executive lied on his resume about his educational credentials.

Unfortunately this is a very common occurrence.  Studies show that over 50% of applicants lie about their job and educational history. Resume lies include falsifying academic credentials, padding dates to mask employment gaps, exaggerating job titles, embellishing job responsibilities and achievements, claiming sole responsibility for team efforts and even making up fictitious employers.

A thorough background check will usually detect these lies and save your company precious time, money and embarrassment.

City puts brakes on hiring Smithsonian fleet manager after he flunks background check

(Source: nydailynews.com) New York’s plan to put one person in charge of its 26,000 vehicles sputtered to a halt when he flunked a city background check, sources told the Daily News.  Bill Griffiths, the fleet manager at the Smithsonian Institution in Washington, had been picked as New York’s first Citywide Chief Fleet Management Officer.

When the Department of Investigation checked his résumé, however, it found he claimed an educational credential he hadn’t really earned, three sources said.  The sources would not say what the credential was, but the offer was rescinded for the post - which would have paid up to $185,000 a year.

Read more.

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New Hampshire to Reorganize Court System

News reports this week confirmed rumors that New Hampshire plans to reorganize their court system, eliminating approximately 60 court clerks. The money saving effort, will see many clerks dismissed or demoted. In their place, New Hampshire plans to adopt a “circuit court system” with the remaining clerks managing more courts. If passed by the legislature, the reorganization will go into effect on July 1, 2011. New Hampshire’s court system has not reported whether delays are expected as a result of the reorganization.

Read more here.

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