Can My Employer Really Look at My Credit History?

When people think about what an employer might examine to evaluate their employees, they think of things like their resume or curriculum vitae, their references, their criminal background check or even how they dress. However, many employers now add an additional step to their employee evaluation process: a credit check. Most people may be surprised to discover an employer can do this, and they’re probably curious as to why.

An employee credit check is like other forms of credit checks, such as those done by banks deciding whether to issue a loan, or landlords deciding whether to lease an apartment to someone. The difference is that these are requested by an employer when they are looking to hire someone, or when they are considering someone for a promotion or raise. They contain a significant amount of financial information, including your debts (including things like credit card debt, mortgages or student loans), your history of payment (including any late payments), and any liens or other court judgments outstanding against you.

Employers most commonly request this information for jobs where an employee will be handling other people’s money or have control over some or all the company’s finances, or where the employee will be in a management position. The reason for this is simple: someone who has bad credit, perhaps as a result of substantial debt or unpaid bills, has a strong incentive to abuse their authority and steal from the company or from customers. Additionally, a history of late or unpaid bills could be interpreted as a sign of irresponsibility, or at least an inability to properly manage one’s finances. As time has gone on, however, more employers are using employee credit checks at all levels of their companies.

However, there are a few things to know about employee credit checks. First, an employee must always consent in writing to a credit check by a current or prospective employer, and they must be informed if their credit history is used against them. Second, they must be permitted to see what is in their own report and have a right to dispute any information in that report. Finally, any negative information older than seven years, or any bankruptcy older than ten years, must be removed from the report.

If you are seeking to dispute a use of a credit check by your employer, it is important that you seek the guidance of an experienced New York employment lawyer who can protect your legal rights and advocate on your behalf during the legal process. Steven Mitchell Sack, the Employee’s Lawyer, is a New York employment lawyer who has considerable experience in handling the many aspects of employment law. To schedule an appointment with New York City employment lawyer Steve Mitchell Sack, call (917) 371-8000.

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