Credit Check

• A credit check involves looking at a person's credit report, which includes all the information a credit reporting bureau has collected on a person's credit history. The employer will be able to see any outstanding debts that the person has, as well any times in recent history in which he was late making payments or settled a debt. This may give the employer some idea of whether person is in debt and if he pays his debts back on time.
  
  

Financial Responsibility

• An employer may want to know an employee's credit history because it may give him some idea of whether the employee is financially responsible. If the prospective hire has a habit of paying debts back late or not at all, the employer may infer---correctly or incorrectly---that the employee is not responsible with money, or even in general. This may make him a less attractive candidate to the employer.
  
  

Security

• In addition, some employers, particularly those who are hiring for positions that require the person to be extremely trustworthy, may want to know if a person has any large outstanding debts. If a person is deeply in debt, he may be less trustworthy, as he may be more likely to be willing to do unethical things for more. This may make him more of a security risk.
  
  

Considerations

• Exactly how an employee will use a candidate's credit report, if he looks at it, will vary greatly depending on the policies of the employer. In some cases, an employer may look specifically for defaulted debts, while in other cases the employer may only care about bankruptcies. However, the employer may not be allowed to use this information in making his hiring decisions, as some states have laws against this practice.