Why do employers want to check debts on a candidate?
There are several reasons employers may want to know more about a person’s potential debts, such as:
- Debt may indicate financial difficulties.
- For roles where the candidate handles money or financial information, it is particularly important to know if the person has financial problems that could put the company at risk.
- Reviewing someone’s debts can provide insight into the candidate’s financial responsibility and decision-making.
However, it’s important to emphasize that having debts does not necessarily make someone unsuitable for the role. For example, many people have mortgages or student loans, which are not necessarily seen as a negative. It is always a good idea to discuss openly with the candidate before drawing any conclusions.
Is debt public information?
Some parts of a person’s financial history may be public information, but this depends on the type of debt involved. Debts handled by the Swedish Enforcement Authority, such as unpaid taxes or fines, may be publicly available. If a person has an ongoing debt balance with Enforcement Authority, this can be viewed by both private individuals and companies, and some debt information can be ordered by individuals. However, other types of debt, such as bank loans or credit card debts, are usually not publicly available and require a credit report from an authorised credit reference agency.
How do you check someone’s debts?
To get access to financial information and debts that are not public, you can contact a credit reference agency. You can order a credit report that includes details such as payment history, income, debts, business involvement, and property ownership.
If you, as an employer, hire DISA to check a person’s debts or do a major credit check, we handle the entire process and ensure that everything is done in a legal and ethical way.
Laws and regulations on employers’ right to run a credit check
Several laws and regulations govern the right of employers to conduct credit checks on potential employees in Sweden.
Employers should also be aware that unnecessary or excessive credit checks can be perceived negatively by job applicants and potentially damage the company’s reputation.
Here are some key points:
The Credit Information Act requires employers to have a legitimate purpose for requesting a credit report, which must be linked to the employment, for example, if the role involves financial responsibility.
The GDPR outlines requirements for processing personal data, including financial information. Employers must have a lawful basis for processing such data and must inform the person concerned about the processing.
Information from a credit report may only be used for the specific purpose for which it was obtained and may not be kept longer than necessary.
Employers must ensure that the use of credit information does not lead to indirect discrimination against certain groups, as outlined in the Discrimination Act.
DISA helps you find out if someone is in debt
Checking a person’s debts is an important part of a thorough background check. However, it is essential that employers and recruiters comply with the law and ensure that the check is justified by the job duties. DISA offers a comprehensive solution for background checks, including national and international credit checks.
With DISA, you get a complete picture of who you are hiring, allowing you to make more informed and confident decisions.
Frequently asked questions about debt checks in employment:
Under the GDPR, information should only be kept for as long as it is necessary for the purpose of the processing, and employers should ensure that the information is deleted as soon as it is no longer needed for the recruitment process. It may be wise to consult a lawyer for specific guidelines
Yes, if the debts are relevant to the position and the employer can objectively justify the decision. It is important that the employer adheres to the principle of relevance to the job, in line with the Credit Information Act, and avoids discrimination under the Discrimination Act.