The short answer is yes. Any business can ask hiring prospects to allow them to check their credit history with written consent. However, there are a number of reasons why you should seriously consider whether running credit checks is an effective hiring process for your business.
1. Limitations of Credit Vetting
Most hiring managers that use credit checks as a part of their vetting procedure state that they do so to judge the prospect’s level of responsibility. Yet, there is one major flaw in this system. Credit reports were never meant to be tools for screening applicants. Vetting applicants by the means of their credit worthiness may cause you to misjudge great additions to your company.
Repeat after me: Credit reports were never meant to be tools for applicant screening...
There are many applicants that are coping with past financial woes which go beyond their control. For example, the housing bubble of 2007 affected many financially responsible people. Others may continually feel the effects of unforeseen medical expenses. In some other cases, applicants may have poor credit history due to unpaid school loans. Such situations may have no bearing on a person's ability to perform well. In fact, some studies show that an increased number of job applicants with lower credit scores due to job layoffs.
2. Moving Beyond Credit Checks
Building a great company begins with finding employees that work well within your business’s culture. While credit checks accomplish little towards evaluating a candidate's ability to mesh well with the hiring manager and the rest of the team, there are advanced tools that provide significant insights. Candidate.Guru uses big data to give hiring managers a unique understanding of the applicants who match the culture of their business. Just as large organizations use analytics to forecast economic markets, Candidate.Guru makes use of data science to predict a good culture fit. Schedule a free consultation to learn more.