Credit report use for checking Human resources

If you are an employer using credit reports for background checks or hiring services from third party agencies that use these procedures, you should make sure that the federal credit report act is being complied fully as otherwise you may face serious legal consequences that may cost you a lot of money on the long run.

Security has become a serious matter and thus most employers want to cover themselves from future difficulties. However, the thin line that separates security from privacy should not be crossed or else, the employer can be liable for violating the mentioned act.

The numbers are amazing, 80% of companies human resource management confess that they run criminal background checks on their candidates due to the security concerns, 10 years ago, that number was only around 50%. The candidate credit standing, credit capacity, and personal characteristics are usually included in investigative consumer reports that can be ordered by employers for the purposes of hiring personnel, promoting personnel, reassigning or retaining personnel.

In order to access and order a consumer report including background criminal, credit and personal checks an employer must make it very clear to the applicant that these investigations will take place. Only then the employer may request a report on the candidate attaching the signed disclosure to the report requirement. However, even with the disclosure, if the information is used in violation of any equal employment opportunity legislation, the consequences of that violation will apply. Credit bureaus are obliged to provide all this information on requirement to any individual that wishes to know what information is included on their databases that may affect job or credit opportunities.