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How to Conduct a Credit Check for Employment Purposes

Author: David B. Weisenfeld, XpertHR Legal Editor

Knowing when to run a credit check for employment purposes is more complex than it may sound. While criminal background checks can be seen as having a disparate impact on minority job applicants under federal civil rights law, this is doubly true with good credit requirements. Minorities and women statistically experience higher levels of bankruptcies and damaging credit reports. Moreover, several states place limits on the use of credit checks for employment purposes. Accordingly, employers seeking to run credit checks of potential employees must proceed with caution. Nonetheless, these checks may be necessary for certain types of jobs.