Can I Use Credit Reports to See if Job Applicants are Responsible?

A Kantola Learning Minute

An HR director says she wants to hire only the most responsible employees and asks if it's okay to use credit reports to verify an applicant's qualifications. Is it a good idea, and what do you need to know before you proceed? Find out in this week's Kantola Learning Minute with Lester S. Rosen, J.D., founder of Employment Screening Resources®.

Hi, Les Rosen here with another Kantola Learning Minute. Interesting question about credit checks: "Can I use credit checks just to see if applicants are responsible?"

I would generally recommend that an employer approach credit checks with a great deal of caution. First of all, of all the pre-employment tools you can use, credit checks are ones that feel as though they invade privacy. They also don't tell you as much as you might think. Now, if you're hiring someone to be a CPA, or they have access to cash or assets, it might be important to know about the person's credit history to make sure you're not hiring an embezzler. But, running a credit report just to see how a person handles their personal life, well, there's not a lot of data that suggests that how you handle your personal life in any way impacts how you might handle work performance.

So, unless you have a really solid reason to take a look at a credit report, and it's clearly related to the job you're hiring for, employers should generally avoid running credit reports, and keep in mind there are eleven states or so, and there are probably more in the future, that have placed a number of restrictions on the use of credit reports.

So, when it comes to the use of credit reports in employment the best advice is to be careful out there.


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