Background and Credit Check

Facts About Employee Background and Credit Checks

When you are applying for a job, it may surprise you to learn that the employer will require a background check. Once reserved only for people working in high levels of government and people in the financial industry, businesses perform an increasing number of background checks. Here is what you should know regarding their investigations.

Items Included in a Background Check

How in-depth an investigation is depends on the hiring company and what they are willing to pay. It can range from simple character references to full reviews of your personal information. Here is what typically is included in a background check:

More on Credit Reports

Employers can pull your credit report for any type of position ranging from entry-level mailroom employees to CEOs. There is a growing belief that you are more likely to embezzle from a company if you are overextended and struggling to make your minimum payments. Some employers believe that a low credit rating is indicative of poor judgment and self-control. If you want to ensure that your credit won’t prevent you from getting a job, then you should try to improve your rating. You can also have a message added to your report explaining if a rough patch of late payments or bankruptcy was the result of a layoff, illness or other family tragedy.

Most people don’t understand why a company cares about credit ratings. They view this as an invasion of privacy, but the hiring companies disagree. Used for everything from setting insurance premiums to issuing mortgages, your credit report may come into play when you apply for a job. In addition to providing important information about judgments and liens, employers can determine what your spending habits are and how stable your lifestyle is. It helps employers determine if you are financially responsible and good with money, qualities that are vital for people in the finance industry. Even though you may not agree with this aspect of a background check, it is completely legal at this time and a fact of life for job seekers.

Records that are Off-Limits

There are certain records that may not be considered in a background check. When looking at the credit report, employers cannot look at bankruptcies that are more than 10 years old. With court records, emplyers can review civil suits, judgments and arrest records that have been entered in the last seven years. With the exception of criminal activity, employers cannot report any negative information that is more than seven years old. Other information that cannot be discussed or researched as part of a background check includes your age and marital status.

Information from Former Employers

If you left your last job under less than favorable circumstances, then you might be a little concerned about how interviews with them will turn out. While your former boss can tell the truth about your performance, the company also wants to avoid the liability of saying something that is more opinion than fact. This is why many companies now have a policy of only confirming basic information like last position held, final salary numbers and dates of employment.

Requesting Background Checks

Most companies choose a third party background check agency to run the reports and provide them with information. Some employers will also gather information themselves once they have your necessary permission. Companies interested in a complete background check with as much information as possible will invest in a private investigator or more detailed services from a background check agency.

Applicant’s Rights

You have the right to know that an employer will perform a background check. The information can only be obtained after they have provided you with the necessary disclosures and received your consent on a separate document. You are also entitled to a copy of the report if it results in adverse action being taken. However, you are only entitled to a copy of the information if the report was assembled by a third party agency. Employers who perform their own background check are not required to provide you with any information.

If you find a mistake in the report, you should go through the necessary steps to have it corrected. The process can take a few months, but it will protect your reputation in the end. Background checks are a part of modern employment, and making sure that your information is correct will help you avoid being turned down for a promising job.