The term employment credit check refers to a report used by employers to verify the financial and identity information received from job applicants. While employment credit checks are typically used during the hiring process, they can also be used when making a decision to promote or retain an employee.
As part of their hiring process, employers may perform a number of background checks. Also known as an employee credit check, this information is used to gain an understanding of a job applicant's financial health, integrity, and responsibility. It's also used to verify information provided on job applications. Employers can obtain a report from any one of the three consumer credit agencies (TransUnion, Experian, Equifax).
The information contained in this report includes: other names used (maiden names, aliases), current and prior mailing addresses, Social Security numbers, debt (personal loans, mortgages, car and student loans), payment history, prior work history, in addition to public records such as judgments against the job applicant, bankruptcies and liens.
The Fair Credit Reporting Act (FCRA) outlines the consumer protections process that all employers performing a credit check must follow:
Note: State laws may prohibit, or limit, an employer's use of credit reports when making hiring decisions. If a state law provides stronger consumer protections than federal law, the state law must be followed.