In our digital world, obtaining a person’s credit history is an easy and inexpensive undertaking. Thus, it is unsurprising that more employers are running credit checks on job applicants as part of their screening process – 60 percent, according to the Society for Human Resource Management.
Credit checks are often used to confirm information contained in a résumé, or to gauge a candidate’s anticipated trustworthiness. There is also a perception, particularly within the financial sector, that given financial pressures, an employee with a poor credit history is more likely to commit fraud or theft on the job.
This theory is not unfounded. The Association of Certified Fraud Examiners has found that fraud in the workplace is most often committed by employees living beyond their means or with financial difficulties.
Meanwhile, our faltering economy has had a detrimental impact on people’s credit histories. Due to late payments or inactivity, banks and lenders are closing credit card accounts and reducing credit lines at historic rates. Widespread foreclosures have also taken a toll on consumers’ credit. Even those with a history of good credit are now facing declining credit scores because of a few occasional missed payments.
There is a perception that many of these financial troubles are consequences of uncontrollable economic circumstances, causing some to question the fairness of the use of this information in employment decisions. Responding to these concerns, governmental entities have recently taken measures to prevent companies from relying too heavily on credit reports.
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