Credit Checks: Giving Credit Where Credit is Due
volume 3 number 2
Although it seems almost everyone has access to your credit history these days, there are strong legal restrictions on how credit information can be obtained and used in hiring. For one thing, credit checks must be demonstrably job related - which means that inquiries are generally limited to candidates who would have access to classified information (in other words, can they be bribed?); control over large sums of money (are they trustworthy?); or influence over the client's investments (ditto).
Even then, there are stringent guidelines for making a credit check. For example, the candidate not only has to be informed that a check will be made, but she must authorize it in writing, and the credit reporting agency must be notified of that authorization. A candidate not hired because of information on a credit report must be provided with a copy of the report as well as a consumer rights summary prior to rejection. Someone can not be denied employment simply because of having filed for bankruptcy.
Because the laws are so rigorous, we suggest you check with an attorney or state Chamber of Commerce before you run any credit checks.