Credit checks improve hiring practices

Companies that run background screenings and consumer credit report checks on prospective hires typically do a better job of bringing on new staff, according to Entrepreneur magazine. Jeff Huckaby, chief executive at rackAID, told Entrepreneur that such screening practices are vital to the quality of his company's hiring. Huckaby acknowledged he may use consumer credit reports as a barometer for an individual's ability to overcome challenges. He told Entrepreneur that by using credit reports, he may choose to hire someone who has overcome personal financial struggles over someone who has not.
"When you hire someone for sensitive positions, you need to learn as much about them as you can," Huckaby told the magazine. Credit screening for hiring stretches across a swath of levels and experience. According to a 2010 survey by the Society of Human Resources Management, 60 percent of companies screen a prospect's consumer credit report. Within that group, the figure jumps to 91 percent for positions of a sensitive nature, such as a position where money is handled, compliance jobs or technology jobs. Among C-level employees, 46 percent of credit reports are screened. Yet, only 34 percent of individuals who handle personal information - medical records, salary and background information - are screened.