Solutions/Financial & Business Products
Credit Reports
Lead with integrity: Compliance and Credit Report Checks
Credit Reports offer valuable insights into an applicant’s financial history and responsibility. SmartHRCheqs™ sheds light on what Credit Reports entail in the pre-employment screening process and how they can contribute to informed hiring decisions.
Because of the ever-changing regulatory landscape and restrictions, caution should be used in requesting and using Credit Reports for employment decisions. While Credit Reports are a great tool for employers, caution must be exercised to ensure compliance with relevant laws and regulations. A great alternative is our Liens, Judgments, and Bankruptcies Search, described below; its use is not restricted in an employment background investigation.
1. What information does a Credit Report for employment purposes contain?
Unlike credit reports used for lending purposes, which include credit scores, employment credit reports focus on historical data and do not impact an applicant’s credit score. They typically include the following information:
- Credit history: Provides a summary of past and current credit accounts, including types of credit (credit cards, loans, mortgages, etc.).
- Account balances: May include outstanding balances on various credit accounts.
- Payment patterns: Details an applicant’s history of making timely payments on credit obligations.
- Public records: May include information on bankruptcies, liens, and judgments.
2. How Can Credit Reports Be Used in the Hiring Process?
Credit reports can be a valuable tool for employers when used responsibly and in compliance with fair-hiring laws. They can provide insights into an applicant’s financial responsibility, which may be relevant for certain positions, such as those involving handling cash or sensitive financial information.
3. What are liens, judgments, and bankruptcies, and how do they impact credit reports?
Lien: A legal claim against an asset indicating an outstanding debt. This information may be included in a credit report.
Judgment: A court order requiring payment of a debt. Judgments can negatively impact credit scores and may appear in credit reports.
Bankruptcy: A legal proceeding involving an inability to repay debts. Bankruptcy filings are typically reported on credit reports for a set period.
4. Are there additional credit report services for businesses?
SmartHRCheqs™ offers expert-level services that provide access to lien, judgment, and bankruptcy data for companies. This information can be helpful when assessing the financial viability of potential business partners or vendors.
Making Informed Decisions with Confidence
Credit reports, when used strategically and in accordance with legal guidelines, can be a valuable tool for employers seeking to build a financially responsible workforce. Contact SmartHRCheqs™ today to discuss your background-screening needs and discover how credit reports can contribute to your hiring strategy.
