Should Employers Do Credit Checks On Applicants?
It seems that more and more companies are checking the credit of potential candidates as part of their background check process.
I didn’t have a lot of luck finding good information about this but if I had to guess, I’d say that this would be much more important in jobs that require money management. I can see why a company who is recruiting somebody to manage their finances would want to look at how the candidate manages personal finances as a predictor of how good a job they’d do. But, on some level this credit checking business irks me.
I can honestly say that I handle my work business in a much different way than I do my personal business. I don’t manage money at work and if I had to guess why the credit checking irks me I’d say it’s because I’m not so good at money management. I don’t have terrible credit but I sure wouldn’t want my ability to get a job to hinge on it.
Don’t worry, they can’t legally check your credit without your consent so if you are interviewing with a company who has this practice, they’ll ask you to sign a release.
Regardless of where you stand on this issue, it’s yet another reason we all need to keep a close watch on our credit reports to make sure everything there is accurate. It sure would be rotten to get passed over for a job because of something inaccurate on your credit report.
If you’ve had experience with credit checks during the hiring process, we’d love to hear about your experience.
When I was in the corporate world, I routinely did credit checks on applicants. While it may seem intrusive to some, I think it is a good practice for employers. Stability and reliability are important attributes in any employer-employee relationship. If we found that an applicant had sketchy credit, we wouldn’t necessarily eliminate him or her, but we would address the issue up front, which is a lot better than addressing it later, for all concerned.
In the same vein, candidates ought to check the credit of companies they are applying to. You probably don’t want to commit yourself to a company that is being sued, has enormous debt, is extremely slow pay, etc.
One employer (financial institution) checked my credit as part of the background investigation. The position that I was applying for was in a customer service call center and no money was actually to be handled. I was told by the recruiter to write a letter explaining the poor credit. I was honest about the situation, and basically admitted that I’d made some poor credit decisions in the past. I explained that I was in the process of paying off my debt & highlighted my worth as an employee. Well, I got the job. Moral of the story: if everything else in your background is clean and your employment history is strong, some employers will give you the benefit of the doubt if you don’t pass the credit check. My advice: just be honest about the causes and explain what you’re doing to fix it. It worked for me!
this needs to be challenged.
in todays economic climate, preventing a job seeker a job based on credit isn’t right especially if the job they are applying for has nothing to do with their credit rate. many unemployed individuals today have bad credit because of layoffs, spousal financial abuse, divorces, repos, foreclosures. how in the world can a person improve their lifestyle if a company say no…just because of your credit. laws need to be changed. the eeoc need to stop this…this is discriminatory.
to put it frankly.. some hiring managers/ceo’s don’t have credit issues because they are greedily taking undeserved bonuses that should go to workers they are laying off.
employers that do credit checks? that b.s. ceo’s steal more that everybody put together and they have excellent credit. that’s another reason for these companies not to hire quailfied employees. these companies are to damn nosey, like a lonely ol hags. nowadays everybody has bad credit. exect us TEXAS folks. so i’m guess if you have bad credit your a theif or something. this country is pitiful, i see why other countries hate us and try to kill all white people. btw i have a 786 fico, my on company and i hire the best person for the job bad credit or not!
all people with bad credit won’t be able to find a job so they will start robbing and killing people with jobs just for food. then all the good credit people with jobs will be dead or targets. this is halarious! who makes these retarted rules anyway?
I received a letter of disqualification from a prospect employer because of my credit history. I have been laid off since September of “08″ and searching day after day for a job. I think it is a bunch of crap that they base your employment on your credit. My background and everything else is perfect, except for my credit. I am a single parent mom of two children, completely on my own. The only current thing on my credit (that is in good standing by the way) is my student loan, I put myself through college. All the negative is from 4 to 5 years ago,from my divorce and spousal financial abuse. I tried to explain to the hiring company( that has nothing to do with money) and they didn’t want to hear it.Employers use credit history to gauge responsibility, I think it is absolutely ridiculous! My credit score may be bad but not for one second has that ever effected my work ethics!
The ability of employers to use credit reports in hiring decisions should be limited to upper level and security clearance positions. Every applicant with bad credit has a story behind their history and that story and events of their lives is not part of the credit report. This is elitism at its finest. The cycle of bad credit cannot be broken by the underclass if they cant get jobs that would improve their situation and in turn improve their credit report. Email your congressman and get him to take action to outlaw this practice!
I do not think credit reports should NOT be used to determine whether a candidate should be hired. Sometimes people have problems paying their obligations. I think employers need to stay out of credit reports and base their hiring decisions on whether a person has the skills and ability to perform the job. My credit is none of anyone’s business.
sorry double negative–CREDIT REPORTS SHOULD NOT BE USED IN THE HIRING PROCESS, was what I intended to say.
Credit checks, and even “consumer reports” done employers are a violation of a person’s privacy, as far as I am concerned. It is nobody’s business what your financial status is—and, I agree with the previous poster that said that upper level management and CEo’s steal more money than anyone else employed at a company, and their credit is perfect!! So, it is a very poor indicator of someone’s “qualifications” and their ability to do a job. Some people with horrible credit are excellent employees who happen to have been financially ruined by an ex-spouse or by some bad mistakes when they were young. Their employment status should not be based on that. If someone is a felon, that’s a different story. This world has turned into “Big Brother”, just like from the book “1984″. If prospective employers are looking at our credit reports, then why shouldn’t we be able to look at the credit reports of CEO’s and executives of publicly traded companies? We should be able to see their credit reports and decide if we want to invest our money with a company based on the credit reports of the people running it!! I do understand the whole thing about identity and the “post 9-11″ thing, but after identity has been proven, then no further action should be allowed to be taken based on someone’s credit report. We all make mistakes, and being “judged” as to whether we are “worthy” of having a particular job should be based on actual qualifications, not on if we made any mistakes in our lives.
One question to employers who feel that credit checks are necessary:
How the hell I am supposed to get out of a financial hole and repair my credit if I cannot get a job?
I know what credit reports look like, I used to be a collections agent, nowhere on those reports shows WHY I am in debt, which could be divorce or health related expenses and DOES NOTHING to show my worth as an employee nor my education level. My ex husband has screwed me, so why should I have to be accountable for his mistakes FOR SEVEN YEARS? When 42% of Americans have bad credit (USATODAY.COM)and companies hire based on credit, they are further fueling the recession and (since most people with bad credit are people of color) are committing a form of institutionalized racism.
For most of the jobs that the majority of the country are seeking, I do not feel a credit check is relevant. I don’t believe that a poor credit score determines the quality of a person or their skills. There may be certain jobs where it is required, but for the large portion of the country that are unemployed, a credit check is unfair. I feel it is as irrelevant to a position as someone’s race or religion. It almost feels like a type of profiling and it should stop. A credit score is a personal matter and no one should feel judged or punished because of it.