You're in the thick of hiring a sales or marketing manager. Should you run a credit check?

By running a credit check, you're requesting a credit report from one of three major credit bureaus. That report will tell you how many credit cards your applicant has, how much money he or she owes, and whether or not the person has declared bankruptcy in the last 10 years.

DEPENDS ON POSITION Typically, companies run credit checks “on the theory that someone who can't manage his or her own finances probably isn't qualified to manage the company's either,” says Lisa Guerin, attorney and co-author of The Essential Guide to Federal Employment Laws.

So, should you run a check on someone who won't be handling money? “It's critical for our company to know who we are hiring,” says John Aurgemma, co-president of Rhode Island Home Improvement in Warwick, R.I. “We thoroughly investigate any applicant.” Aurgemma says that investigation includes a credit check on those seeking upper management jobs. But for administrative staff, sales, marketing, and installation jobs, credit checks are no longer done. The company used to weigh credit checks as heavily as criminal background checks but found that it bypassed good potential employees that way.

At Capizzi Home Improvement, in Cotuit, Mass., credit checks are similarly regarded as useful mainly for upper management and bookkeeping positions, says president Thomas Capizzi Jr. And even then, if there are dings on a potential employee's credit record, there would have to be other red flags for the company not to hire that person. “It's case by case,” Capizzi says.

JUST ONE PART Neither Melani Bros. in Hampton Roads, Va., nor Patterson Home Improvements in Jacksonville, Fla., find credit reports worthwhile as part of background checks. “The only people who should have a credit check are those in jobs that relate to accounting,” says Melani human resources manager Lynn Irvine. While Patterson Home Improvements has run background checks for a few years, the emphasis is researching criminal warrants, driver's licenses, and Social Security, says network and benefits administrator Wendy Patterson.

Guerin advises company owners who do use credit checks that they must inform the applicant and get his or her permission. “Legally,” she says, “an employer could be sued either by the applicant or by the Federal Trade Commission” if the employer checks an applicant's credit history without permission. While many companies use credit checks in background investigations, “often an employer's attitude toward credit checks depends on whether the company has had theft or financial mismanagement,” she says.