Should Companies Pull Potential Employees’ Credit Reports?


The Michigan Collection Law Blog has posted an article about an employer’s risk of pulling a potential employee’s credit report.

Under the Fair Credit Reporting Act, employers have the right to pull a potential employee’s credit report during the interviewing process, with permission from the person being interviewed. Someone who is serious about being hired is very unlikely to say no and not give the company permission. But just because they give the company permission, is a credit report worth pulling?

The answer can be yes and no.

If the job position calls for someone to be handling large amounts of cash, then reviewing their credit report is a good idea. It will show you how responsible they are with their personal finances, which is a good indication how responsible they will be with company money. If the potential employee is in a lot of debt and is loose with his own money there’s a good chance that same attitude will translate into how he handles company money.

If the job doesn’t involve handling company cash, pulling a credit report isn’t really necessary. Some companies still pull credit reports on all employees, regardless of their position. This can have a negative impact for some groups of people. For example, if someone is in debt because of a family member’s medical bills they shouldn’t be penalized. Credit reports are not, nor should they be, the ultimate factor for a company’s hiring decision.

Gary Nitzkin, author of the article, suggests that the best solution is to pull a potential employee’s credit report only if they’re going to be handling sums of company money or other valuable property. Obtaining the credit reports of all employees is unnecessary.

If you have had problems with credit reporting errors and have questions or concerns, feel free to contact us through our website or by calling 205-879-2447.

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