What are Employee Credit Checks?
Credit Check Services; ISO 9001:2008 Certified, leading UK specialists in vetting people.
At Credit Check Services we carry our credit checks on employees for many companies and organisations ranging from the security services sector through to HM Government. As we are often asked about what a credit check comprises, the frequency of checking, and whether there is any impact of checking an employee's credit history, we have published some further information here.
What does a credit check cover?
In its simplest form a credit check will search for adverse financial history relating to CCJs, bankruptcy, IVAs, and debt management orders. Credit checks can also be expanded to cover related factors such as:
Sanctions checks: HM Treasury and OFAC
Identity and address verifications using financial databases
An individuals credit search history, e.g. the frequency and type of credit applied for
Any corrections to an individual's credit file
CIFAS: Fraud prevention service (available to CIFAS members only)
Credit risk scores
It should also be noted that there are some differences within UK countries. For example in England and Wales the civil processes include County Court Judgments (CCJs) and Bankruptcy, within Scotland the equivalent to these are termed Court Decrees and Sequestrations respectively.
What level of check should employers request?
For some categories of employment there are specific levels of screening required, examples are the security services (standard BS7858:2006 applies), and the FSA which stipulates employee checks required under the fit and proper persons test (FSA handbook).
For most employers the level or extent of employee credit checking is defined by the supply chain, for example when contracting to the financial services sector it is very common for a contract to stipulate that staff have undergone a level of credit checking.
How often should an employer carry out credit checks?
Typically credit checks would be carried out annually as any individual's credit history is subject to change. The frequency of checking depends on whether there are any regulatory requirements specifying this, and the degree of risk mitigation an employer wishes to implement.
Will carrying out credit checks impact an employee's credit rating?
When an individual applies for credit their credit file will record a specific marker/flag to signify to other prospective lenders that a credit application may be in progress; this type of search can have an impact on an individual's ability to obtain credit, for example multiple applications may suggest higher risk. The type of search we carry out leaves a different type of marker, this marker will signify a search related to employment. The employment related searches we carry out will not affect an individual's credit rating.
What permission is required to carry out an employee check?
To request a credit check on an employee it is a legal requirement that the employee has given their permission for a check to be conducted. When purchasing online through our website there will be a check-box to confirm you have the employee's permission. Where account services are provided this will also be one of the terms in our written contract.
Find out more about our services today
For an overview of our standard employee credit checks click here
Or call us on 01992 719 234
Or email us service@credit-check-services.co.uk