Does someone order your credit report? Want to order a credit report on someone else? A credit screening can reveal important information to a possible landlord, job, vehicle dealer, or banker. Many people think a credit score is all about information, but that is not true.
The following things can be easily looked at when checking someone’s credit. Before you get someone’s credit report, make sure you have permission.
Identity: The first thing you want to look for is Identity verification or proof of identity. Do you know who this person is, but is the information they gave you accurately? A credit screening shows details including a person’s name, social security number, past and present addresses, spouse’s name, date of birth, and employers. This is an excellent way for the person making the report to see if they are who they say they are. Take note of any red flags.
Credit History: This is the juicy part and where you will find the most helpful information. Credit screening reveals everything about a person’s financial standing, including but not limited to credit. You can see how many bank accounts the person has open, how many active credit card accounts, whether or not the person has any loans, and whether they are personal bank loans, school loans, payday loans, or mortgages.
You can also see how long each account has been active; the older the account, the better. It’s not all you see; You can also see if the loans have co-signers and how high their credit limit is. This information is aimed at helping a potential loan provider, credit card company, or potential landlord assess whether the applicant is a risk-taker.
Public Records: Don’t worry; If you still need more information about the applicant, a credit screening will provide a lot of clarity. You can see all past evictions, bankruptcies, whether they paid taxes or not, and whether they’ve ever had a civil judgment. Once the above information is found, you can make the best decision about whether or not to approve an applicant for a credit card, loan, housing, or job.
Remember, and we can’t stress this enough before you pull someone’s credit report or ask a background check company to obtain documents, make sure you have the applicant’s consent.
How credit check can affect your hireability
Depending on the type of job, your credit history can be used to determine your hireability. Credit check for employment while hiring is imperative.
To guarantee they make informed hiring decisions, more and more businesses are adopting background check services, including credit checks.
Background checks are a common best practice for companies of all sizes, including those in the sharing economy. You may likely be asked to consent to a background check during the hiring process for a new job.
In addition to checking your identity, criminal history searches, and driving record checks, employers may also have the option of conducting a credit check, depending on the role, the job, and often whether fiduciary duties are involved.
A credit check and a credit score are two different things. A credit report contains information about your credit history, balances, available credit, and prior payments. Your credit score is a three-digit number that represents your total credit standing. It’s crucial to know that employers are not given access to your credit score when a credit report is requested for job purposes.
Credit checks are typically carried out for positions involving financial commitments or when an employee has unrestricted access to cash or valuables, such as trade secrets.
Why is a credit check for employment imperative?
Employers check credit for two main reasons: security and liability.
Security: Credit reports aid in verifying a person’s identity and history, two factors crucial to a background check.
Responsibility: Good financial responsibility is shown by a clean credit report. Employers are seeking candidates who can be trusted to carry out their responsibilities and are honest.
A credit history that demonstrates overall personal financial responsibility can be critical to employers looking for candidates with this trait. A credit background check is the best source to check and confirm any employee’s background.
The importance of good credit
Even though not every company will run a credit check, it’s still important to be ready. The best course of action is to practice sound financial management, which includes:
- Timely payment of bills
- Smart debt management
- Negotiating and resolving outstanding issues
Don’t panic if your credit record is less than perfect. Nothing on your credit report is permanent; if you work hard and are diligent, you can maintain a clear credit history in the future.
Why is a credit check a necessary step in the hiring process?
While an employer must conduct a thorough credit history check in the organization’s best interests, it is essential to understand why credit checks are such a vital part of an employee screening service. With any organization, financial management and the integrity of your entire business depend on it. Therefore, hiring an employee with a history of financial management can destroy your reputation and brand reputation.
Especially if the employee holds a management position or any role directly related to your company’s finances, the risk is much higher. However, such risks are prevented by thoroughly screening each candidate using a credit check, regardless of their position.
Moreover, how a person handles their finances says a lot about their attitude, intentions, and the kind of person they are. Therefore, with the help of a credit check, you can easily flag all cases of credit risk and understand how responsible they are, helping you avoid many future problems.