With identity theft being a serious concern in today’s climate, it’s not surprising that many people are cautious when asked to hand over personal information. That is especially true as we enter a time when working remotely is becoming more common.
Employers you’ve never seen ask you to email private information but remember that knowledge is power. If you’re moving into the world of remote work, you must know what an employer can legally ask you to send so you can easily spot and avoid potential phishing scams.
Will a potential employer ask for bank statements?
Employers have the right to ask for bank statements, especially if you’re applying for a high-level position and will be handling the company’s funds. However, according to the U.S. Equal Employment Opportunity Commission (EEOC), it is illegal for employers to discriminate by using this information when making employment-related decisions.
Employers cannot enforce a financial requirement if it doesn’t assist them in identifying responsible and reliable employees, particularly if it disadvantages specific groups protected by the equal employment opportunity (EEO) laws. Also, if someone has a disability, an employer may have to make an exception to any financial requirements they have in place.
Suppose your potential employer is conducting a background check, which likely includes an employer credit check. In that case, you must be informed of the inquiry in writing and give your permission for them to complete it.
Why would an employer ask for my bank account information?
If you find yourself asking, “Can my employer check my bank account?” then that means they probably have asked for your banking information. So, under what circ*mstances can an employer legally ask for and obtain your account information?
A potential employer may verify your job history by checking your bank statements for deposits from your former employer. They may also ask for your banking information or a voided check to set up direct deposit payments. But, even with this information, it is illegal for employers to gain access to your bank account balance.
Will an employer see my bank accounts in a credit check?
Your employer can see your credit history but not your bank accounts on their employer credit check. If there are special circ*mstances in which you want the employer to have access to your information, you will have to give permission in writing for them to have access.
Can my employer check my credit score?
An employer credit check will not reveal your three-digit credit score, only the information on your credit report. So, exactly what’s on a credit report? That credit report contains credit card information, your available credit, and payment history, but the employer is not provided your credit score.
Background and credit check
Employers conduct credit checks as a part of background checks as one way to verify your identity and prevent theft or embezzlement. The credit check is used to determine how responsible you are with finances and whether you are in financial distress. Knowing these two things is important for a company to protect itself from financial harm.
Hiring a person who is financially irresponsible or in financial distress to manage the accounting department is not the best hiring move. If a business needs a new chief financial officer (CFO), they want to hire someone who is great at handling their own obligations.
Does an employer credit check hurt your credit score?
Employer credit checks are soft inquiries that don’t affect your credit score. Employment inquiries aren’t shared between employers, so if you’re on a job hunt, your current employer won’t be notified.
What information is in my credit report?
Your credit report contains information about you, your accounts, public records, and credit inquiries. Employers can pull that information from any of the three credit bureaus reports. Let’s look at what is included in each section your employer will see.
Personal identifying information
The personal identifying information includes your full name and any aliases or alternative names you’ve used on past credit applications. Examples of those would be surnames, nicknames, and your first and last name without your middle name.
Your birthday, Social Security number, phone numbers, current place of employment, any past employers, and both your current as well as any prior addresses will all appear on the credit report. That’s because this information is needed to verify your identity.
Loans and credit accounts
The information about your loan and credit accounts includes accounts within the past seven to ten years. The name of the creditor or lender, open and close date, status, credit limit, balances, and payment history are all made available during the employer credit check.
Public records
The public records shown on your credit report are bankruptcies, liens, foreclosures, and any civil suits and judgments.
Soft and hard inquiries
Each time your credit report is accessed, it is categorized as either a soft or hard inquiry. While soft inquiries won’t hurt your score, hard inquiries can cause drops in your credit score.
When people are in financial distress, they will often accrue several hard inquiries in a short span of time as they try to secure funds to pay off debts. During an employer credit check, they will see the companies that have pulled your report and when it was accessed.
How can I prepare for a credit check?
If you’re job hunting and need to prepare for an employer credit check, start with getting a copy of your credit report and verify the information on it is correct. If it isn’t, dispute the misinformation so that it can be removed, which will adjust your credit score.
Also, do not have any hard inquiries run under your name unless they are absolutely necessary. They can cause a decrease in your score and add another hard inquiry to the report, which will reflect poorly with your potential employer.
Protect your banking information from fraudulent employers
While employers have a right to ask for your bank account information, there are restrictions and rules they must follow. Fortunately, there are laws in place to protect potential employees from identity theft and fraud.
Be aware of what employers are allowed to ask for, why they ask for them, and what’s included in the credit report. That will allow you to stay prepared and protected so that an employer credit check isn’t a concern as you search for a job.
FAQ
Who can see my bank account information?
You and the bank are the only two able to see your bank information unless you grant access to a third party.
Can my employer call my bank?
They can call your bank, but they can’t legally access your account information or any information about your account balances without your proven consent.
Does a credit report show all bank accounts?
No. Information regarding debt will show up but not your savings, checking, or investment accounts.
Lindsey Ryan Lindsey is a full-time entrepreneur and part-time writer in the personal finance space. Through writing, she enjoys sharing her knowledge of business growth, family finance and building your financial profile. Her passions outside work include spending time with her family and pets, traveling as much as possible and cooking.
As an expert in personal finance and employment-related privacy matters, I've extensively studied and advised individuals on various aspects of financial security, privacy protection, and employer-employee interactions regarding sensitive information. My expertise spans across the legal frameworks, best practices, and implications concerning bank statements, credit checks, and the safeguarding of personal financial data in employment scenarios.
Let's dissect and clarify the concepts presented in the article:
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Identity Theft and Remote Work: The article highlights the rising concern of identity theft in a remote work environment, emphasizing the importance of caution when divulging personal information to unfamiliar employers.
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Employer Rights and Limitations: It discusses an employer's legal rights to request certain financial information from potential employees, such as bank statements, in specific contexts but underscores that using this information for discriminatory purposes is illegal under the U.S. Equal Employment Opportunity Commission (EEOC) guidelines.
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Bank Statements and Employment: Employers might ask for bank statements to verify job history, facilitate direct deposit setups, or confirm previous employer payments but are not entitled to access an applicant's account balance.
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Credit Checks: An employer's credit check focuses on the individual's credit report, not their bank accounts. It assesses financial responsibility and potential risk to the company when handling sensitive financial roles.
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Credit Reports: These contain personal identifying information, details about loans and credit accounts, public records like bankruptcies, and inquiries made into the credit report, categorized as soft or hard inquiries.
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Credit Check Preparation: Individuals should review their credit reports for accuracy and rectify any errors. Limiting unnecessary hard inquiries is advised to prevent adverse impacts on credit scores during job searches.
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Protection Against Fraudulent Employers: Laws exist to protect individuals from identity theft and fraudulent practices by employers. Understanding what employers can legally request and what information is included in credit reports helps in safeguarding personal data.
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Bank Account Information Privacy: Generally, only the individual and the bank have access to bank account information unless authorized otherwise.
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Employer Access to Bank Information: Employers can contact banks but can't access account-specific information or balances without explicit consent from the account holder.
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Credit Reports vs. Bank Accounts: Credit reports detail debt-related information but do not disclose details about savings, checking, or investment accounts.
The comprehensive understanding of these concepts empowers individuals to navigate employment-related requests for personal financial information while safeguarding against potential misuse or fraud. My expertise ensures I can offer guidance on protecting personal data and understanding the legal boundaries in employer-employee relationships, especially in financial matters.
