Future Hires: Here's Everything You Need To Know About Employee Background And Credit Checks

By Gerri Detweiler

If you’ve applied for a job lately, you may have been asked to fill out a form authorizing your prospective employer to conduct a background check on you. Here is an excerpt from an employment screening authorization form:

The report may contain information bearing on your character, general reputation, personal characteristics, mode of living and/or credit standing. The information that will be included in your report include: credit reports, social security number trace, criminal records checks, public court records checks, driving records checks, educational records checks, verification of employment positions held, personal and professional references checks, and licensing and certification checks.

Typically, employers contract with background screening firms that, in turn, get credit reports from one or more of the three major credit reporting agencies: Equifax, Experian or TransUnion. (Employers do not get credit scores. These reports also do not include your date of birth, to help protect against age discrimination.) Employers who want to review your credit reports as part of a background check must get your written permission first.

Just because you sign one of these forms doesn’t necessarily mean the employer will check your credit. Only 13% of employers surveyed by the Society of Human Resources Management said they conduct credit checks on all employees. Four states (HI, IL, OR and WA) also have laws that place restrictions on how/when credit reports can be used for employment, and other states are considering similar legislation.

If your employer, or a prospective employer takes any adverse action against you (for example, does not hire you) due to information in your credit reports, you must be notified of that fact and given the opportunity to request a free disclosure of your file.

In addition to credit checks, however, employers may conduct background checks to verify your prior employment history, research criminal records, etc.

There are two nationwide specialty reporting agencies that provide free annual disclosures to consumers under the FACT Act:

LexisNexis Risk Solutions, LLC, says it is “the leading provider of background checks in North America and conducts background screening for over half of the Fortune 500 companies.” Their Employment History Report can include information about your employment history along with other background information. Note that if LexisNexis has not provided an Employment History Report about you to an employer, you will not have a report on file with them.

The Work Number
According to the work number, their “most popular feature is its employment and income verification service. It is used by… pre-employment screeners, and others who need to verify someone’s employment status and sometimes, his or her income as well.”

Warning: Do not fill out a background check or credit check authorization form online unless you have verified the company and the job opportunity are legitimate. It may be an identity theft scam.

To request your free reports:

  • Lexis Nexis: Call 1-866-312-8075 or visit the LexisNexis website.
  • The Work Number: Call 1-866-604-6570 or visit TheWorkNumber.com.

Next week: I’ll share how to get free disclosures of medical reports.

Gerri Detweiler Personal finance author and Credit Advisor for Credit.com, Gerri contributes budgeting, debt recovery and savings information online. She is also the co-author of Reduce Debt, Reduce Stress: Real Life Solutions for Solving Your Credit Crisis. This post originally appeared at Credit.com.

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