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What Does a Credit Report Say About a Potential Hire?

Compliance Documentation in Buffalo NY

You’re thinking about adding a great new candidate to your company in Buffalo, NY, but first you’d like to run a credit report checkSo, what can a credit report tell you? Here’s a quick overview. 

What a Credit Report Says About a Potential Hire 

Is this person honest? 

As with other types of background checks, a credit report is a smart way to find out if a potential hire is who they say they are. Credit reports provide basic identification information along with a person’s financial history. If the information in the report doesn’t match up with what a candidate told you, they may not be telling the truth. 

Is this person reliable? 

A potential candidate with lots of late payments and/or lots of debt could struggle with organization and responsibility. After all, if they have trouble managing their own affairs, these bad habits could reappear in the workplaceNeverthelesslook for overall trends rather than few mistakesTo be fair, most of us miss paying a bill every now and again.    

Does this person make good decisions? 

Someone who handles their money well is likely to make good decisions in other areas of their life too.  And, although a perfect credit report is ideal, don’t discount a potential hire who has overcome financial difficultiesIn the end, someone who has worked diligently to get out of debt probably has shown as much resolve as someone with a spotless record. 

Is this person in financial distress? 

Large outstanding balances and excessive debt could be a sign of trouble ahead. This especially is true if a candidate owes significantly more than their purposed annual salary. Unfortunately, people who are have serious financial problems may be more likely to engage in risky behaviors.      

Should this person be handling other people’s money?  

Not all employees directly handle company or customer money. Therefore, evaluate credit reports accordingly. For example, an administrative assistant with $10,000 in student debt and a handful of missed payments is probably fine. However, you might want to think twice about hiring a CFO with $500,000 of debt and ongoing history of missed payments.  

What to Do If a Credit Report Raises Red Flags 

Keep in mind, if you do decide to disqualify a potential hire based on their credit report, your company needs to follow the required procedures. According to the FCRA’s pre-adverse and adverse action processyou must let the candidate know their background screening was a problem. This gives the person chance to contest and correct possible errors in reporting.  

Are You Looking to Run a Credit Report Check in Buffalo, NY? 

Metrodata Services, Inc. can help ensure you are hiring reliable and responsible employees that fit your business model. We offer employment credit check reports as well as a variety of other background screening services in Buffalo, NY and beyondLearn more about partnering with us today!   

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