Employment Credit Checks
- Author Kristie Lorette
- Published September 6, 2010
- Word count 548
Most people know that when they apply for a loan or credit, the lender or creditor is going to check their credit. What may not be common knowledge is that some employers also run a credit check as part of the employment process. When a potential employer runs a credit check on a potential employee, it is typically called an employment credit check.
Types
A potential employer has the right to pull a credit report or to run a credit check on an employee before offering employment. An employer also has the right to run a credit check before deciding to promote the employee, give the employee a raise or deciding whether to continue employment of the employee. According to the Employee Issues website, an employer has the right to run a credit check because there are currently no laws that exist that prohibit discrimination based on the status of the credit report.
Identification
The employer requests credit information from the three credit agencies: TransUnion, Equifax and Experian. An employer is typically privy to pulling a full credit report on an employee, which can include personal information and information pertaining to credit and debt accounts held by the employee. Information the employer can obtain from a credit report may include the year the employee was born; current and previous addresses; marital status and name of spouse; names of current and former employers; bankruptcy, liens and judgments; child support and alimony obligations; payment history on any account listed; a credit score; and other companies that have checked the credit report.
Permission
The Fair Credit Reporting Act does govern how employers can obtain a credit report on employees. An employer has to inform an employee that a credit check is going to be run and the employer has to obtain written permission from the employee. If an employee does not provide consent to the employer to check credit, the employer won’t be allowed to run a credit check, but this may also mean the potential employee does not get the job and an existing employee may not get to keep their job.
Use
The Fair Credit Reporting Act also requires employers to provide the employee with disclosures before taking action based on the credit report. For example, if the employer intends on letting an employee go, the employer first has to hand over a "pre-adverse action disclosure," which includes a copy of the employee’s credit report and a written summary of the employee’s rights under the Fair Credit Reporting Act. After the employer takes adverse action against an employee, the employer then has to provide the employee with an "adverse action notice," provide the name and complete contact information of the credit agency the employer received the credit report from, the employer cannot disclose the credit check results to anyone else and is not allowed to place the information in an employee’s personnel record.
State Laws
In the wake of the downturn in the economy that began in 2007 and the high unemployment rate, many consumers were not able to pay their bills, which left many of these employees or potential employees with negative credit reports. Some states have proposed bills that prohibit discrimination on employees based on the findings of a credit check by an employer.
Kristie Lorette is a freelance writer and marketing consultant that specializes in personal finance. She is also the editor of The Mortgage & Credit Diva, a blog devoted to mortgage and personal finance tips, tricks, and advice for consumers. You can read Kristie’s blog at www.mortgageandcreditdiva.blogspot.com or learn more about her writing and marketing services at www.studiokwriting.com.
Article source: https://articlebiz.comRate article
Article comments
There are no posted comments.
Related articles
- Costs of arranging a Mortgage in Spain
- Non resident Mortgages in Spain
- Effective Strategies for Paying Off Your Mortgage Faster
- How Does Equity Release Work?
- Florida First Time Homebuyer: The Indispensable Guide of Tips, Programs, and Resources
- How to Become Debit Free?
- Sellers Concession the Closing Cost Option
- Financing Short Term rentals with DSCR loans
- Why move to Roseville CA
- Simple Interest Mortgage Advantage
- Are Low Doc Commercial Loans available in Australia
- How to Obtain a Rural Agriculture Loan Quickly and Easily
- What is a Caveat Loan?
- Tips for improving your Credit Score before getting a Home Loan
- 3 Things To Look out for With An Equity Release Mortgage
- Manage your Debts by Refinancing your Current Home Loan
- How to Get a Home Loan with Unusual Employment or Income?
- 20 Effective Debt Consolidation Loans Tips with Bad Credit
- Tips for Choosing a Non Conforming Lender
- Why is a Good Credit Rating Important in Australia?
- Most Common Ways That People Fall Into Personal Bankruptcy
- How to Choose a Consumer Credit Counseling Agency?
- Consolidate Your Debts and Take Control of Your Finances
- How to get a Home Loan due to a Bad Credit Report
- Debt Consolidation Home Loans are a Solution to Multiple Debt Problems
- Facts You Should Know About Low Doc Home Loans in Australia
- No Doc Loans from Private Lenders
- Home Loans to Consolidate Debt for People with Bad Credit
- How Can I Get a Mortgage If I Have a Bad Credit History?
- Guidelines to Fix Bad Credit Effectively Through Dispute