Why Prospective Employers Might Run a Credit Check How You Can Improve Your Credit Score Here ph
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When you apply for a mortgage or an auto loan, you expect the financing department to run a credit check, but did you know that prospective employers might do the same thing? According to Entrepreneur.com, as many as 20% of employers run credit checks on prospective employees in addition to a background check and other screening procedures. While you might not be expecting your employer to finance a purchase or extend you credit, companies across the nation are using this tool to determine whether a prospective employee represents a high risk to their business. Employers might run a credit check for a variety of reasons, but following are the top four:
Gauge Responsibility. Prospective employers want to know if you are responsible, and one of the best ways to determine this is to run a credit check. This shows them your spending habits, you ability to pay back debt and your collection history. Identity Verification. In this new age of identity theft, employers must be very careful who and how they hire. Running a credit check gives an employer an alternate means for identity verification, which is a plus for both the company and the employee. Employment History Verification. Another reason why prospective employers run credit checks is for employment verification. Since an employee can write whatever he or she wants on a resume or application, employers must be careful about believing what’s been written down. Identify Candidates for Theft. Although this is often considered discriminatory, employers often run credit checks to assess whether or not an employees is a likely candidate for workplace theft. If you have lots of unpaid debt and if you are harassed on a daily basis by creditors, you might be more likely to steal from your employer. The order of reasons above goes from most-to-least common in United States employers, though you never really know why your employer might be running a credit check; they aren’t required to disclose their reasoning. Fortunately, they cannot do this without your permission. During your interview, you will probably be given a form to sign that gives the employer authorization to perform a credit check. If this doesn’t sit will with you, it is always an option to refuse, but you probably won’t get the job.
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What you do need to know is that employers should never charge you to run a background check. This happens frequently and employers will tell you that the fee is to cover the “cost� of your background check, which in reality is non-existent. Your employer might be using a paid database software program, but the U.S. government will run credit checks for free if the employer submits the proper paperwork. If you know in advance that a prospective employer is going to run a credit check, you should be up-front about any discrepancies on your credit report. Address collections issues or unpaid debt and explain why those items are listed in advance so the employer will know what to expect. If you are open and honest about it from the get-go, he or she will be more likely to overlook indiscretions. According to BankRate.com, the most common positions for which credit checks are often run include jobs in finance, accounting and bookkeeping. Any job in which you are expected to handle cash and valuables has a high likelihood for a credit check as are positions in which you will be managing a large group of employees. You should remember, however, that you have every right to check up on a prospective employer, as well. Find out if there have been any complaints lodged with the Better Business Bureau and surf through Internet message boards to find out if previous employees or customers have anything to say. Credit checks are a way for employers to effectively screen their future employees, but you should protect yourself at the same time. What are your thoughts on the subject, and I'll send you a free gift.
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