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September 28, 2016

Employment Credit Checks 101: What You Need to Know

It’s becoming more and more common for employers to delve into employee credit histories before they make a job offer. Around the world, companies are routinely requesting access to personal financial information in order to make final hiring decisions. In many cases, this is necessary and justified. Here’s what you need to know about the process, and how to ensure it’s fair and legal.

What Happens During an Employment Credit Check?

An employment credit check is much like any other credit check, and it follows a fairly simple and straightforward process:

  • A prospective employer must ask for written consent before they can access your credit history.
  • They may require additional identification from you, particularly if you have a common name, to verify that they are looking at the correct information.
  • The employer contacts various consumer credit agencies, like Veda, Experian or Dun & Bradstreet.
  • When the reports are received, they are cross checked, with special attention paid to negative information.
  • If there is negative information, candidates will probably be asked to explain.
  • A decision will be made, once any other checks are done.

Because employee credit checks are quite personal, they tend to be left until later on in the process.

What Employers Need to Consider

There’s nothing wrong with asking prospective employees for an employment credit check, but there are a few things employers should consider before they make it part of the hiring process.

The first thing to think about is whether the credit check is actually necessary for the position. Credit histories are very personal, and asking a prospective employee to reveal their personal information can get you in trouble with privacy laws if they are not strictly necessary. Be sure you need it before you ask!

Next, remember that anything that prevents you from hiring a candidate could be seen as discriminatory, if it’s not relevant. Make sure that the candidate’s financial past is really related to the position before you use it to disqualify them!

What Candidates Should Remember

Let’s be honest: no one really wants a stranger rooting around in their financial past. It is somewhat invasive, and can be a nerve wracking experience, particularly if you have some negative events in your past.

However, in certain instances, it is necessary, and can be a valuable tool for employers.

Research has shown that in cases where employees misused employee funds, they were almost always under financial pressure themselves. Employers know this, and this is why many jobs which require employees to handle money are now subject to credit checks. Employers want to be sure that the people they are hiring for jobs which involve money don’t have external pressures.

In most cases, employment credit checks for those types of job are not negotiable, but remember that you don’t have to agree to them in other cases. If a credit check is not relevant to the position you’re applying for, you can say no, and make it clear to the prospective employer that you don’t feel it’s relevant to the job.

There is a very fine line between important information and potential discrimination, and it’s best that employers and candidates approach the issue with tact, reason and professionalism.


Prior to requesting your own check please confirm, prior to ordering, if our reports will be acceptable to the agency you are providing the report to.

Many countries will not provide official government responses. It is your responsibility to confirm if our reports are acceptable and AIS makes no warranties of their acceptance.

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