Employment Credit Checks

An employment credit check is a background screening component where an individual’s credit history is reviewed as part of the hiring process for certain roles. This is done through a special version of a credit report designed for employers (it does not show a credit score and is a “soft inquiry” that doesn’t impact the person’s credit). ScoutLogic’s employment credit check service pulls a summary of a candidate’s credit history in compliance with FCRA and state laws, giving you the insight in an easy-to-understand format.

While not relevant for every position, employment credit checks can be very important for certain hires.

Assess a candidate’s financial responsibility and trustworthiness. For roles that involve managing money, assets, or sensitive financial information, a credit check gives insight into how a person manages their own financial affairs. Red flags in a candidate’s financial background could affect their suitability for a high-trust position, and, in fact, some regulatory bodies expect financial background checks for certain key roles.

Meet compliance and regulatory needs. In some industries, credit checks are mandated or strongly encouraged. If your company deals with customer financial data or transactions, doing credit checks on employees handling that data can be part of your due diligence and compliance program to prevent fraud and identity theft. Also, if you’re hiring for positions that will have signatory authority or spending power, investors or auditors might expect that you vetted their financial integrity.

Protect your company assets and reputation. An employee with undisclosed financial problems might pose various risks: they might be more susceptible to bribery, or could potentially mishandle company money. By performing a credit check, you might catch something which would prompt a deeper conversation or caution. On the flip side, if a candidate has a solid credit history, that can reassure you of their stability.

Ensure customer and stakeholder confidence. If you’re a business that is responsible for client funds or sensitive data, your clients might expect that you vet your employees thoroughly. Knowing that employees with fiscal responsibilities have been screened for financial responsibility can be a selling point or a requirement in service agreements.

ScoutLogic handles employment credit checks with care, compliance, and clarity, making the process smooth for both employer and candidate.

Strict compliance with laws. Employment credit reports are regulated. Under the Fair Credit Reporting Act (FCRA), we obtain the candidate’s explicit written consent before pulling their credit. We ensure you, as the employer, have a permissible purpose to request it. We also navigate state laws; for example, restrict when you can use credit reports. Furthermore, if the credit report leads you to an adverse decision (deciding not to hire), we can handle the FCRA-required adverse action process if you choose.

Clear, easy-to-understand reports. Credit reports can be dense, so ScoutLogic provides you with a synthesized summary highlighting key factors: total outstanding debt, any accounts in collections or charged off, any bankruptcies or liens, and overall payment history. We’ll list any public records like bankruptcies clearly and note the date and status.

Secure and respectful handling. Because financial information is highly sensitive, we treat these reports with the utmost confidentiality. Only authorized persons in the hiring process see the report, and it’s delivered via our secure online system. For the candidate, we make sure they understand what they’re consenting to and reassure them if they have questions.

Custom criteria and adjudication. Different employers have different thresholds for concern. ScoutLogic can implement your adjudication matrix to flag specific items in the report. We work with you to help you make informed and individualized assessments.

Candidate support and communication. Under FCRA, candidates have the right to dispute inaccuracies in their credit reports. We assist with quick facilitation of disputes, and if there’s a case of adverse action based on the credit check, we ensure the candidate receives all of the notices, a copy of the report, and their rights explained, making the process respectful and transparent.