Background Checks

Conducting background checks on the people you hire is always a smart business decision. Background screenings can uncover a candidate’s job and academic history, provide a criminal report, check references and so much more. A background screening from the professionals at Barada Associates ensures the job candidates are who they say they are.

Before making hiring decisions, it’s important to know as much about your applicants as possible. In our most recent blog, we want to talk about an added layer of security – a credit check – when hiring someone in the financial services industry or for a government position where the potential employee will handle money.

The Ins and Outs of Performing Credit Checks on Employees

Employment credit history checks are popular among many businesses and financial institutions during the hiring process. According to CareerBuilder, it’s estimated that 72% of employers conduct background screenings, while 29% asked for a credit check to be included in the report. 

Before conducting credit or financial checks on job candidates, it’s important to contact a professional background screening company such as Barada Associates to ensure the background check is performed correctly and legally. Job candidates must be informed that a credit check is part of the background screening. He or she has the right to refuse a credit check, but that can ultimately prevent the company from hiring them.

Several states and cities have laws that restrict the use of employment credit checks, usually to only positions that deal directly with a company’s finances, such as bankers, accountants, chief financial officers, and government positions that work directly with finances. We also recommend conducting credit checks on high-profile executives within a company.

Although it’s of the utmost importance to protect consumers’ rights and adhere to the Fair Credit Reporting Act, companies have the right to protect themselves against candidates who have a history of mishandling finances, especially when the position involves having access to large amounts of money.

If credit card companies and mortgage lenders access credit reports for people seeking a loan, it makes sense that companies should be able to do so when they hire someone to manage finances. Barada Associates typically does not recommend conducting pre-employment credit checks outside of the jobs we previously mentioned, including cashiers.

What Does a Credit Check Show?

One thing that is not uncovered in an employee background credit report is the candidate’s actual credit score. It’s also important to note that a credit check does not impact a job seeker’s credit score, and only a limited amount of financial information and credit information is shown, less than what a lender sees.

One of the biggest things the background screening experts at Barada look for in an employment credit report is the number of delinquent accounts, which shows if a candidate is not paying their bills, including medical bills. We also look into the number of accounts a candidate has, late payments, the overall payment history on those accounts, and the amount of delinquent money. High debt, meanwhile, could lead to a higher chance that an employee could steal.

Other findings in a credit report that might raise red flags include liens, foreclosures, or bank account closings. Cases such as this can tell potential employers that this candidate has difficulty managing their personal finances, so why would it be any different at work?

Contact Barada Associates for Your Company’s Background Screening Needs

If you have more questions about credit checks for potential employees or you would like Barada Associates to conduct background checks for your company, contact us today to request a quote or a meeting. Founded in 1979, Barada Associates is one of the nation’s oldest and most trusted providers of employment screening services.