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That used to be a cause for concern, with many reports that employers were increasingly relying on credit checks to make hiring decisions. However, a new report from the Society for Human Resource Management shows that most employers aren’t doing any sort of credit background check on prospective employees.
The study, which was conducted previously in 2010 and 2004, saw the highest percentage of employers (53%) stating that they did not use a credit background check, up from 39% in 2004 and 40% in 2010.
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If you’re wondering what employers are focusing on in these credit checks, the biggest red flag is accounts in debt collection, with current outstanding judgements and a high debt-to-income ratio also red flags. Employers largely ignore foreclosures, medical debt and student debt in their hiring decisions, however.
Another interesting finding from the study showed that 58% of credit background checks happen after a contingent job offer has been made, compared to 33% after an interview but before an offer is made.
The easiest way to know if you have problems in your credit history that would bother possible employers is to pull your Credit Report Card, which can tell you what parts of your credit report are strongest and weakest so you can fix it.
[Related Article: Don’t Let Your Credit Report Cost You a Job]
Image: bpsusf, via Flickr
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