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SHRM Research Spotlight: Credit Background Checks

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Has the use of credit background checks increased? A comparative look: 2010 and 2004

2010 2004

Does your organization, or an agency hired by your organization, conduct credit background checks for any job candidates by reviewing the candidates’ consumer reports?

*Survey margin of error: +/- 5%

In general, how frequently does your organization, or an agency hired by your organization check any of the following references for its job candidates?
Credit Checks

*Survey margin of error: +/- 5%

All job candidates (13%)
Select job candidates (47%)

No (40%)

Always (19%)
Sometimes (24%)\ 42%
Rarely (18%)          /

Never (39%)

Note: n = 343. Excludes respondents who responded “Not sure.”
Source: SHRM Background Checking Survey (2010)

Note: n = 296. Excludes respondents who responded “Don’t know.”
Source: SHRM Reference and Background Checking Survey (2004)

Research Findings

  • The use of credit background checks in employment decisions has not changed in any discernable way over the past 6 years.
  • Most organizations do not conduct credit background checks on all job candidates.
  • Organizations conduct credit background checks for those positions where this information is most job-relevant.
  • Employers place lower relative importance on credit background checks than other job-related factors in making hiring decisions.
  • Employers do not use credit background checks to screen out mass numbers of candidates in the early phases of the application process.
  • Credit background check results are seldom used as a definitive hiring criterion.

 

On which categories of job candidates does your organization conduct credit background checks? (Select job candidates)Job categories by organization

SHRM Research Spotlight: Credit Background Checks

In general, when making a hiring decision about a job candidate, which are the most important factors influencing the final decision to hire a particular candidate over another? Factors influencing the final decision to hire a candidate

When does your organization, or any agency hired by your organization, initiate credit background checks on job candidates? When do organizations initiate credit backgrounds?

Does your organization allow job candidates, in certain circumstances, the opportunity to explain the results (e.g., high debt, bankruptcy, etc.) of their consumer report that might have an adverse effect on an employment decision?

How much percent organizations allow opportunity to explain background check results

Methodology | These research findings summarize two research studies on credit background checks – the Background Checking: Conducting Credit Background Checks data findings which were released January 2010 and a SHRM Poll that was conducted in June 2010 with HR professionals in the employment and recruitment functional areas. Download the complete research findings at www.shrm.org/surveys .

© September 2010 Society for Human Resource Management