Background checks of a job candidate's financial history do and can cost applicants a job offer.
WASHINGTON – Employers are legally allowed to run a credit check on a potential new hire, and many do these days. And those credit checks do cost applicants job offers.
The National Financial Educators Council recently surveyed adults 35 to 54 years old about their experience in the hiring process. Among the 1,200 people who responded to the nationwide poll, 5.2 percent said they had been turned down for a job because of their financial profile.
When asked if their employer ever conducted a credit of financial background check as a condition of being hired or getting a promotion, 26.3 percent said yes.
The Society for Human Resource Management reported that 47 percent of U.S. companies check candidates’ credit histories for at least some positions. The top reasons for doing so are preventing theft or embezzlement, and to reduce legal liability for negligent hiring.
The Fair Credit Reporting Act stipulates that employers must obtain prior applicant consent for a credit check. But the Financial Educators Council said refusal to give consent likely casts the applicant in a negative light regardless of their credit background.