Security measures are taken almost everywhere these days. We, on a daily basis, are surrounded by scammers, people who forge documents to get into places, and other people of the sort. Where most of the situations are being covered to a lot of extents by the digitization of things, we are still, nonetheless, bothered by a lot of them since we fail to see the reasons behind them.
Take an example of credit card checks. Many people are concerned about the fact that many employers ask for a credit card check before they offer employment to someone. Let’s discuss this and build upon that.
Credit Checks for Employment
When we say that many users are going to check credit in case of employment, we mean that they will perform checks on all the times you have taken out or missed payments on a personal loan with no credit check or whenever you have swiped your credit card somewhere. Not only does this note your transactions but also it records your name, addresses, previous associated names and addresses, and social security numbers. The credit check also covers the incurred debts such as mortgages, car payments, and others.
Red Flags in Credit Reports
What can harm your credit reports or cause a red flag to go up?
- Liens: Any lien that is against you can be a sign of irresponsibility.
- Credit Utilization: This can be a sign to your employers that you are not capable of sticking to a budget and are over your head when it comes to this.
- Bankruptcy/Foreclosure: This is a sign of lack of responsibility for the things you are linked to. To an employer, this suggests that you would probably bail on large projects.
- Late Fees: This is a sign that finances cause you significant stress and that you are not capable of keeping up with your expenses and funds.
- Loan Default: If you defaulted on any no credit check installment loans in Las Vegas or car loan, it tells a potential employer that you can’t handle your business, so why would they expect you to handle theirs.
- Considerable activity: Many people tend to open and close accounts at different points in time. Where the reasons might be whatever, employers see this as a red flag and thus, cause problems for you in the long run.
Is it legal?
In simple words, yes. It is legal. However, before an employer can get or extract information for employment purposes or reasons, he or she is bound to notify you beforehand and get your written approval before they establish anything. This is covered under the Fair Credit Reporting Act (FCRA) that they are not allowed to proceed with employment credit checks unless they are allowed to do so by the potential employee. Consent has to be provided to the concerned authorities so that employers can perform their required inquiries. One thing to note here that if you do not consent to the credit check, then the employers might or might not go forward with your application. Furthermore, the federal laws allow employers to use reports of the sort as reasons for opting other candidates.
What Employers Look For
We have already discussed that the credit check performs the collection of all the basic information that is age, name, addresses, and others of the sort. However, what the employers are looking for when they perform is that they want to minimize the risk. The risk of potentially hiring a candidate who has an unclean record and which can lead to the name of the firm or the company being harmed. A lot of employers are looking at reports that can protect them against actions that can violate ethical standards or criminal behavior. Especially in a situation where the candidate is being hired for a post which demands a great deal of responsibility such as government work, medical jobs, or for jobs that are looking to access company funds. All of the jobs that are of the sort require that credit check is performed thoroughly.
What Employees Can Do
While it seems like checks on your credit history and such credentials is a perilous process and is along the lines of your personal information being shared with people you might not want, it is not all doom and gloom. It should be noticed that there are a lot of authorities these days which are continually working towards minimizing this activity.
The Society for Human Resource Management confirms that credit checks are becoming very disfavored for employers as a tool and goes on to suggest that this method of inspection might not exist in the coming future. Another bright side is that you are not entirely helpless in this regard. If you are someone who is planning to enter the job hunt, you’ll need to enroll in credit monitoring to ensure that no unexpected changes will occur.