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Equifax Canada

XML for Human Resources and Employment Screening Includes Open Credit Report Standard

Employers have long used credit reports to assist pre-employment screening, based on the theory that a person's personal financial responsibility predicts responsibility and honesty with the company's money. Today, security and liability concerns demand even wider use of credit data for employment. New tools and open standards for XML in human resources are making the process workable.

Experian, Equifax, and TransUnion are the main U.S. credit bureaus providing credit reports for employment. Background checking companies and large employers find credit reports most useful in an electronic form. Credit report tools ( can be used to retrieve the raw credit bureau data for local analysis and database storage, and convert it to meet the HR-XML specification ( HR-XML is the promising new standard by which human resource systems can integrate credit history data.

An employment credit report is much like a credit report for lending purposes. It shows a person's credit history, with late payments, write-offs, and repossessions. It includes bankruptcies, liens, judgments and other public records. Former addresses, employers, and aliases are listed, sometimes revealing important omissions on the job application. The same information tells which jurisdictions and names should be checked in a criminal background investigation.

Credit bureaus learn of employers and aliases from previous disclosures the individual made when filling-out credit applications, so not all may be listed. The former address information is more reliable, because the credit bureaus learn of changes through existing creditors and the Postal Service.

Credit reports provide alerts for invalid Social Security numbers, and warnings if the number was used previously with a different name. A fraud alert is triggered if the true SSN owner has reported identity theft. Credit bureaus even provide optional USA PATRIOTS Act checking against lists of banned foreign nationals and suspected terrorists, but a "match" always requires further verification.

Good credit implies responsibility and willingness to "play by the rules." Perhaps that's why insurance companies realize lower claims costs for customers with good credit scores. In this era of employers held responsible for employees' actions, and security concerns transcending all job classifications, it makes economic and practical sense to integrate credit report tools for employment into the overall HR system.


MERit Credit Systems