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Employment Credit Check: Identity and Credit

Service Summary - Identity

To help establish identity, ESR performs both the Social Security number (SSN) trace using a private sector database compiled from hundreds of different sources and Consent Based Social Security Number Verification Service (CBSV) directly with the Social Security Administration (SSA). Click on the links below for more information:

Service Summary - Credit Reports

ESR provides employment purpose credit reports that provide a profile of the subject's financial history for the past seven years, including charge-offs, collections accounts, public records, trade lines, bankruptcies, judgments, and monthly payment histories, revealing habits such as living beyond one's means and ownership of large debts with no immediate method of repayment that may be indicators of financial irresponsibility that could affect the workplace.

It is critical to keep in mind that a credit report for employment purposes does not include a credit score.  It does include a credit history but it is an urban myth that employers access a credit score.  There is no relationship between a credit score and job performance.

Employers must use caution when deciding when to pull credit reports to make sure that personal financial circumstances are related to the job function or security requirements. Eleven states – California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, and Washington – have passed laws that restrict how employers can use credit reports for employment purposes. ESR has incorporated compliance with these restrictions into the ESR Assured Compliance system.

Reason You May Need This Information

The SSN trace and CBSV help establish the identity of the report subject. Some employers feel that a credit report helps determine whether an employee is suitable for a position that involves handling cash or exercising financial discretion as well as a possible way to gauge trustworthiness and reliability. Credit history and public records such as judgments, liens and bankruptcies are also included. A report may include previous employers, addresses, and the names used.

Limitations/Notes on Using this Information

An employment credit report should only be requested when it is specifically relevant to a job function and the employer has appropriate policies and procedures in place to ensure that the use of credit reports are relevant and fair.  Of all of the screening tools available a credit report is probably the most sensitive so caution should be utilized. An employer should be careful to ensure the information is current and accurate.  In addition, if a person has been unemployed, an employer may not want consider that period of time in reviewing the credit report.  Employers should  keep in mind that if a person was unemployed, they may have relied upon credit cards to pay critical bills, that could even include healthcare for sick children. 

In California, Oklahoma and Minnesota, applicants have additional rights asking them to check a box to obtain their credit reports as well as their consumer report.  There are strict rules concerning who may obtain credit reports.  ESR conducts an on-site inspection of all employers who request credit reports to ensure that only established businesses with a permissible business purpose (employment) will receive credit reports.  Certain employers may not be eligible to receive credit reports. A number of U.S. states have either passed, or are considering passing, laws regulating credit reports used by employers for employment purposes. Ten states – California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, and Washington – have restricted the use of credit histories of applicants and employees.  The primary requirement is that there must be a business justification for the report. Even in states without such laws, employers need to ensure that the use of such reports do not have a disparate impact amounting to discrimination.  For more on the pros and cons of the use of credit reports, and why employers should approach this tool with caution. See the ESR article on credit reports at http://www.esrcheck.com/Articles/States-with-Laws-Regulating-Credit-Reports-for-Employment/186/.

For more information about the use of credit reports for employment purposes:

Contact ESR

For more information on emploment and pre-employment credit checks, or to order this service, contact Employment Screening Resources (ESR) at Contact Us

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Certified with the National Association of Professional Background Screeners ESR's SOC 2 Audit Report confirms it meets high standards set by the American Institute of Certified Public Accountants (AICPA) for protecting customer information PCI-DDS Compliance Privacy Shield Framework Services Perfromed in the USA Safe Hiring Manual Founding Member of the National Association of Professional Background Screeners