why would an employer be interested in the credit report of a job applicant when
ID: 1140137 • Letter: W
Question
why would an employer be interested in the credit report of a job applicant when making hiring decisions? By the way it would be nice if you could help me answering both questions Review Financial Literacy Activity 10 from pages 60-61 of the one-paragraph essay about grocery store shopping. 31. A prospective employer reviews an applicant's work history and personal references, In addition, he or she may review the applicant's credit report. Why would an employer be interested in the credit report of a job applicant when making hiring decisions?Explanation / Answer
I don't have the necessary reference for question 1. So here I am answering question 2.
A credit report is a detailed report of an individual's credit history prepared by a credit bureau. It include personal information such as current and previous addresses, Social Security numbers, employment history and credit history summary. Some employers check credit reports of the applicants along with the identity documents as a part of the application process. One of the biggest reasons employers will check credit reports of a prospective employee is to be sure their money is in good hands. Any employer would not want that a position which require handling large amount of money on behalf of the company or its clients may go into hands of someone who has a bad record of managing personal finances. Also if someone have a history of mismanaging money in his credit report and then mismanage the company’s money, the company could be sued for negligent hiring by shareholders.
If we talk apart from finance domain, then also negative items on credit report acts as a red flag to the potential employers. For example- multiple bank account closings, liens against the job candidate or any turbulence under credit domain could be interpreted as signs of irresponsibility and negligence and employer might interpret that the employee lack the decision making skills and hence it shows inability to excel in the job.
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