Credit History Check
A credit history check is when an employer reviews an applicant or employee's credit report to assess their financial responsibilities and stability as part of the hiring process or during employment.
Example #1
Before offering a job, a company requests permission to check the credit history of a potential employee to evaluate their ability to manage finances.
Example #2
An existing employee's credit history is reviewed as part of a routine background check for a promotion within the company.
Misuse
Misusing credit history checks can lead to discrimination against individuals from certain socioeconomic backgrounds, unfairly impacting their employment opportunities. For example, a company rejecting a qualified candidate solely based on a low credit score without considering other relevant factors is an unjust practice. It's crucial to protect against such misuse to ensure fair opportunities for all candidates regardless of their financial history.
Benefits
One benefit of conducting credit history checks in employment is that it can help employers assess the responsibility and trustworthiness of candidates for positions that involve handling finances or sensitive information. For instance, a company hiring a financial advisor may find it relevant to review the candidate's credit history to gauge their financial management skills.
Conclusion
Credit history checks can be a useful tool for employers to make informed hiring decisions, but it's essential to ensure that they are conducted fairly and without bias. Protecting against misuse of credit history checks is vital in upholding the principle of fairness in the employment process and preventing discrimination based on financial status.
Related Terms
Employee PrivacyBackground ChecksFair Labor Standards Act (FLSA)Non-Compete Agreement