Robert Capwell, president and CEO of Comprehensive Information
Services Inc. ( www.cisonline.com), is a founding member and current
co-chair of the board of directors for the National Association of
Professional Background Screeners.
Is multi-tasking an effective
way to work?
HOW YOU ORGANIZE your finances could be a reflection of your char-
acter. If you are able to manage your credit wisely and live within your
financial means, this could be an overall reflection of how you manage
your work life. Employers look at income-to-debt ratios and past-due bal-
ances on a credit report as part of their evaluation. A high number of monthly delinquencies and
credit accounts that are referred to collection agencies could reflect a high disregard for creditors.
Additional information such as non-disclosed residences or aliases can appear on a credit
report. Criminals who know the background-screening process sometimes use a bogus name
or address on an employment application to throw off criminal-records researchers. Accessing
one’s credit history could provide untold information and put a criminal-records researcher
on the right path.
Employers traditionally use credit reports when hiring employees in high-risk or security-sensitive areas. If part of the job is to have access to cash, corporate finances or customer credit-card information, an employer will most likely pull an applicant’s credit report. This practice
should please any skeptic, especially if the employee is handling personal information. Identity
theft and financial fraud are among the fastest-growing criminal concerns in America today.
Although the idea of having an employer review your credit report is disconcerting, background-screening companies preach the proper use of credit reports and remind employers
that credit information is only one part of the story when considering a candidate for employment. Hiring managers are reminded that there are two sides to every story, and an interview
should be conducted with the candidate to discuss any derogatory information. Family hardships such as the loss of a job, illness or a significant change in family income could result in
poor credit and should be considered within the context of the situation.
Consumers should be aware that employers using third-party background-screening firms are
bound by the Fair Credit Reporting Act when accessing a credit history. Disclosure, authorization
and the use of adverse information must be used within the guidelines of this federal law. C
Opinions expressed are those of the
individuals or organizations represented
and are presented to foster discussion.
Costco and The Costco Connection
take no position on any Debate topic.
from experts in the field:
Chi Chi Wu is a staff attorney at the National Consumer Law
Center (NCLC), the co-author of the NCLC’s manual Fair Credit
Reporting and a contributing author to the NCLC Guide to
Surviving Debt, available at www.consumerlaw.org.
WHILE AN EMPLOYER might legitimately want to check a credit
report when hiring for a position dealing with a lot of money, such as a
bank teller or money manager, the use of a credit check when hiring for
a position such as receptionist raises the obvious question: What does
someone’s credit history have to do with how well he or she will answer the phone? Some
proponents of credit checks argue that people who are deadbeats or sloppy about their credit
are irresponsible in the rest of their lives. However, not all people with bad credit are at fault.
Many people get into financial trouble for reasons they can’t control, such as being laid off,
getting sick and being saddled with medical bills, or a divorce. A well-known Harvard study
found that medical reasons were responsible for about half of all bankruptcies in the United
States. A lot of hard-working Americans live just one paycheck away from financial disaster.
Another problem with employers relying on credit reports is that the reports can be
chock-full of errors. Studies have found that up to 70 percent contain some kind of mistake,
with about one-quarter serious enough for the consumer to be denied credit (or employment, presumably). Even worse, growing numbers of Americans have their credit reports
horribly damaged from the crime of identity theft.
Employers who use credit scores (a three-digit number calculated from a credit
report) should also know that there are significant racial disparities in credit scoring.
Whatever the reasons, employers should be cautious about using a hiring tool that may
reflect racial differences.
If you are seeking a job, what can you do to protect yourself? At a minimum, check your
credit report for any errors. You can get one free credit report every year from each of the
three major credit bureaus. Order your report from www.annualcreditreport.com or phone
toll-free 1-877-322-8228. If you see any errors on your credit report, file a complaint with the
credit bureaus. For more information on your credit-reporting rights, check out the Federal
Trade Commission’s Web site at www.ftc.gov. C