Pre-Employment Credit Checks (Long!!!)

[tropicsgoddess]

Some of us may have run into this before with applying and/or interviewing for a job offer: credit checks. Some companies or departments that are in the accounting, finance fields and so forth tend to conduct credit checks to ensure that the candidate they might hire is fiscally responsible and trustworthy. Some companies do conduct credit checks also because of employees who travel and need their credit checked before renting a car or any other services that could be barred due to credit history. Other companies or departments outside of the financial arena conduct credit checks as well. Not everybody has pristine credit, especially due to circumstances beyond our control (i.e. job loss,divorce, etc.) but not everybody with bad credit is a bad person. A friend of mine ,Annie was trying to get out of the restaurant business and was trying to find a steady job with better hours and possibly pay. She found out that this chain furniture store nearby her was hiring for an Administrative Assistant position. She went in there professionally dressed, gave out her resume and filled out an application. Annie was called in to come in for an interview with the Store Manager who took a shine to her and had her come in again for the second interview. This time the second interview was with the Office Manager and she passed that one as well. The Office Manager told Annie that before she is to begin working for chain furniture store she had to pass a drug screening (the pee test), a criminal background check and a credit check. Right away Annie went to the laboratory to have her drug test done, then she waited a few more days to get that call. Unfortunately the call wasn't what she was hoping for. The Office Manager had Annie come in and told her that despite the fact that she passed the drug and background checks, she failed the credit check and they were unable to hire her, the Office Manager gave Annie a number to call Human Resources to explain the situation. When Annie called Human Resources, they told her that it was corporate policy and it was out of their hands to even hire her despite the fact that she was an honest person who made a bad mistake and had trouble being able to repay her debts and repair her credit. Now my thing is bad credit doesn't always mean that the person is bad and potential thief. We all make mistakes and we can't magically make them disappear with the flick of a wrist like we want to. I personally think that credit checks for employment that is not in the financial industry or any service employees use for their jobs that can be barred due to credit history is bull. What do you all think?

[ebonyknight]

Well, it makes sense to me. I sure wouldn't want a broker who can't pay his own bills managing my money. Or someone who doesn't realize they are out of money but still have checks writing invoices for others. I think it's logical to not want someone managing the office funds, that cannot manage their own.

God forbid that a criminal background check is run on someone wanting to be a security guard or an education check run on someone wanting to be a teacher. Are you sure that real estate inspector is bonded????

*shrug*

Sure sometimes your credit gets messed up to circumstances beyond your control, but life in general isn't fair. I went through a similar period in my life. I didn't complain, I sucked it up and corrected the situation.

Fortunately, credit is something that can be repaired, unlike a criminal background.

Now there are companies that will test you for nicotine and ask you if you are a smoker. If you are, they won't hire you. As unfair as it may sound, it's their company and if they don't want any smokers, *shrug*.

Unfortunately company policies rarely take individual cases into consideration. While your friend may not be a "bad" person, a good portion of people who can't/won't pay their bills are not the types of people you want to handle corporate funds or any monetary transactions.

[Boozy]

I think it's bullshit.

Yes, I can understand all the reasons anyone can name for allowing it. But at some point we need to balance corporate America's insatiable desire to know everything about everyone who works for them, buys from them, or does business with them with the necessity of your average American to work and provide for themselves.

Did you know that an estimated 80% of all credit reports have major errors on them? And that these errors are virtually impossible for the average consumer to fix? Our lives are already being held hostage by this system created by the banks: This sometimes arbitrary score determines where we can live, go to school, and now, where we can work. This is a seriously flawed system, and it's time to stop worshiping at it's fount.

For the record: I have a near perfect credit score. Banks are practically throwing cheap credit at me. Just in case anyone thought my rant was just sour grapes.

[miyon]

If this is the case I will never get a job.
I have had medical problems for a few years. My credit it in the crapper. I try to pay off what I can each month but, for example, I have one right now for $700. I cant afford to pay all of it so I make payments but they still sent it to a collection agency.

Job hunting might just make me more derpressed. :confused:

[Greenday]

Honestly, it all depends on the job. ebonyknight summed it up nicely. Owners aren't going to want to hire people to manage large amounts of money when they can't even handle their own money.

For example, with my current job working for the military, do you REALLY want someone who has repeatedly screwed up their own financial situation to be working on multiple deals/budgets that can be over $20 million? If you can't handle small amounts of cash in your personal life, what makes an owner/boss think that you could deal with huge amounts of cash?

[Slytovhand]

I'm thinking that unless the job totally requires complete financial responsibility, a credit check would be irrelevant.

PA or AA, as in the example?? Nope.. that's what accountants are for (now, if she was going for an accountants position, I'd be thinking it makes more sense). Similar for banking, or a financial position where you accept or decline credit applications.

My reasoning is the same EK was thinking though... law enforcement and security require criminal checks, teachers require background checks for paedophilia, etc etc...

[Boozy]

I don't buy that everyone with a poor credit score is fiscally irresponsible. Look at miyon's situation...no one wants to get sick and wind up in the hospital without insurance. But it happens.

[Giggle Goose]

How exactly are you supposed to dig yourself out of the hole if you can't get a job (i.e., money? :confused: Sell drugs? Whore yourself out? Oh, but then you wouldn't pass a background check. :rolleyes:

I buy the explanation about working in finance or something, but I'm with TG and Boozy. I think it's irrelevant.

[linguist]

Honestly, it all depends on the job. ebonyknight summed it up nicely. Owners aren't going to want to hire people to manage large amounts of money when they can't even handle their own money.


what about when bad credit has nothing to do with not being able to handle your own money? i know for my part i've never in my adult life made even a late payment, but my credit is trashed due to a divorce in which my ex chose not to pay those portions of our shared debts that were assigned to her in our divorce decree. there are even debts she incurred after our separation but before the divorce was final that now appear on my credit report that i've spent the last 6 years disputing to no avail.

i guess what it comes down to is that i understand the reasoning behind credit checks for some (though by no means all) jobs, but i feel it should be analyzed on a case by case basis rather than painting all those with bad credit as fiscally irresponsible or bad people.

[Greenday]

what about when bad credit has nothing to do with not being able to handle your own money? i know for my part i've never in my adult life made even a late payment, but my credit is trashed due to a divorce in which my ex chose not to pay those portions of our shared debts that were assigned to her in our divorce decree. there are even debts she incurred after our separation but before the divorce was final that now appear on my credit report that i've spent the last 6 years disputing to no avail.

i guess what it comes down to is that i understand the reasoning behind credit checks for some (though by no means all) jobs, but i feel it should be analyzed on a case by case basis rather than painting all those with bad credit as fiscally irresponsible or bad people.

Supposing that they can not only see your score, but why it may have gone down, they should at least ask about it. Such as your case, it's bad debt that has nothing to really do with you.

[IDrinkaRum]

I worked as an Administrative Assistant for a Government Contractor company. The private investigator not only talked to my neighbors, family, but they also checked my credit report/history. Why? Because, even though I was "just" an AA, I could get my hands on sensitive materials and theoretically, I could sell those secrets to the highest bidder. That would be the reasoning if I had a low credit score, whether or not it was due to my lack of personal financial know-how or because of things happening that were beyond my control.

You know your credit is bad, the reasoning behind not hiring you, is that you might do something risky to get it back up. Even Administrative Assistants can get a company credit card. Even Administrative Assistants can get into the petty cash. (Usually petty cash is in handled by either the receptionist, the Administrative Assistant or the Office Manager depending on the size of the office/company).

Anyone can pad their time card with any amount of hours to get over time - essentially stealing money from the company. The money then could be used for any number of reasons.

That is why Credit Checks are required for a lot of office jobs.

[CancelMyService]

Well if you work for the government, directly or indirectly, then it would make sense. I think what the topic at hand is that a lot of non security/government/finiancial jobs are requiring credit checks and it's BS. It's too easy to game the credit system or have a score that doesn't paint an accurate picture. My wife's credit score os skewed because she has a huge ass student loan in her name. She makes the payments on it, and all her other bills, but when she checks her score her debt to income ratio is way out of whack because of her huge ass loan. Meanwhile, my credit would appear to be spotless when in fact I filed for bankruptcy about 7 years ago and it's at the point that it wouldn't show on a normal credit report.

We just went to buy some furniture, and my wife got turned down for the store credit card because of her out of whack score. The finance lady was about to give us the "we're sorry you can't buy all this nice stuff" speech when we just pulled out another card and paid the sucker in full (we only applied for the store card to get the financing, we didn't need it to make the purchase). The lady's jaw almost hit the counter, I guess we just looked like broke ass rednecks or something since we were dressed to go paint my mom's house later that day.

[powerboy]

I think that it is bullshit unless you are going to be handling millions of dollars.

[Greenday]

I think that it is bullshit unless you are going to be handling millions of dollars.

What about $100,000 for a small company?

[Boozy]

You know your credit is bad, the reasoning behind not hiring you, is that you might do something risky to get it back up.

My credit score reflects my borrowing history. That's it. It has nothing to do with my character.

FICO scores don't turn people into criminals.

[IDrinkaRum]

No, but I'm pretty sure companies have had employees in the past who turned criminal because of their low credit scores. You don't have to actually be handling the money directly to try to circumvent the procedures to get at the money. The hiring companies are trying to protect their assets. I am NOT saying this is right, but that's the way the ball bounces.

As for my husband and I? Everyone and their mother wants to give us credit cards & loans because our credit scores are in the upper 700's. *le sigh* It's pathetic.

[powerboy]

What about $100,000 for a small company?


I think what I said implies that amount also.

[ebonyknight]

I think what I said implies that amount also.

So then can we imply that, that goes for $10000 or a $1000 as well? That's what a secretary or an AA might handle for company "petty cash".

[Boozy]

No, but I'm pretty sure companies have had employees in the past who turned criminal because of their low credit scores.

I hate to harp on one point, but I really feel that this needs to be made clear: People with low credit scores are no more likely to steal than someone with a good credit score.

I realize that this goes against popular belief, but almost every criminology study in the last 20 years has indicated that poor credit does not turn otherwise honest people into criminals. What may be more surprising to people is that even poverty does not tend to turn people to crime. (All bets are off at starvation-level poverty, but this happens rarely in the developed world.)
Crime does tend to be more prevalent in poor neighbourhoods, but poverty itself is not a trigger.

[IDrinkaRum]

I understand that Boozy. However, these corporations, either small or mega large are all run by men in suits who are more interested in keeping their bottom line in large numbers of money. They truly believe that people with low credit scores are thieves and will do anything to steal. Only the people with high credit scores are ethical because they care enough about themselves, the economy (and even their family if they have one) to keep up with the Joneses without going into debt.

I am not saying this is right. I am saying this based on the corporations I have worked for. I am saying this by working closely with the HR people, the Security Personnel (when I was working at the Government Contractor companies), the Office Managers I've known.

Any amount of money be it from petty cash & higher can be tempting to anyone - whatever their credit score/how much money they have in their bank account. But the people doing the hiring, doing the checks just see numbers. And they fall back on the fallacy "low credit score = theif".

[Boozy]

Okay, I see what you're saying now. We actually agree that the practice is wrong, but we both understand why the companies are doing it.

Companies make all sorts of bone-headed decisions based on habit, shaky research, and personal biases. And they'll continue to do so as long as they think it's profitable.

The only solution would be to make it illegal to use FICO scores for any purpose other than making the decision to grant credit.

[powerboy]

The only solution would be to make it illegal to use FICO scores for any purpose other than making the decision to grant credit.

That is exactly what they should be for anyway. Not to be based on getting hired anywhere

[BlaqueKatt]

Fortunately, credit is something that can be repaired, unlike a criminal background.

I'm currently around $15,000 in debt-due to medical bills. Being very sick and not having insurance will do that to you. I don't have any spare money to pay those bills-my credit is shot, there is nothing I can do to repair it, because that amount is two-thirds of my yearly income. I pay what I can, when I can, but I've been unemployed the last two months. Why should a company be allowed to hold a previous illness against me? We're talking 4 years ago-viral meningitis and pneumonia-and $5,000 of that is from the heart-attack symptoms I had back in April caused by a virus, the only hospital my then-current insurance covered was an-hour and a half drive away. My rent, phone bill, electric bill, husband's car insurance are all paid on time-but the medical debt shows on my credit report, and I don't happen to have a spare 15 grand lying around, that should not be taken into account when I'm applying for a job. If it has no bearing on the job I'm doing, or my qualifications why does it matter?

Now there are companies that will test you for nicotine and ask you if you are a smoker. If you are, they won't hire you. As unfair as it may sound, it's their company

And in my state it's illegal.

[ebonyknight]

I'm currently around $15,000 in debt-due to medical bills. Being very sick and not having insurance will do that to you. I don't have any spare money to pay those bills-my credit is shot, there is nothing I can do to repair it, because that amount is two-thirds of my yearly income. I pay what I can, when I can, but I've been unemployed the last two months. Why should a company be allowed to hold a previous illness against me? We're talking 4 years ago-viral meningitis and pneumonia-and $5,000 of that is from the heart-attack symptoms I had back in April caused by a virus, the only hospital my then-current insurance covered was an-hour and a half drive away. My rent, phone bill, electric bill, husband's car insurance are all paid on time-but the medical debt shows on my credit report, and I don't happen to have a spare 15 grand lying around, that should not be taken into account when I'm applying for a job. If it has no bearing on the job I'm doing, or my qualifications why does it matter?

Because, in order to pay off that debt that is haunting you, you may resort to illegal means to repay it. Of course, no one has a crystal ball and no one knows you on a personal level, so unfortunately, a policy is in place to take care of the general problem. Not the specifics.

If you document your situation and let your perspective employer know, perhaps they will make an exception. If they don't, I am not sure they would be a good, understanding employer that we all would like to work for. Again, life ain't fair. My mother was a nurse and the most giving person I (and many people have said the same) ever met. Yet she died of cancer through no fault of her own. While any number of selfish, evil people continue to live healthy lives. Unfortunately, bad things happen to good people.

As far as the smoking ban, I wouldn't bother applying to them. If they are going to want to run my personal life, then they are probably not an employer I would like to work for. Same applies above.

[Kyree]

Where does that leave people like me, who get turned down for everything because I don't have enough credit?


Not even big things like cars, or houses, or other loans. I mean, I have a checking/savings/credit card through my bank. I want to switch to another bank closer to me. They declined me (while managing to tack on two inquiries to my credit report in doing so) because... (exact wording) "You don't have enough lines of credit." I have two credit cards. I guess they want me to pull out a few loans and a sign up for a few of those pre approved credit cards?

I'd really hate to see the effect of having not enough credit or no credit in that situation. It causes me enough headaches without having to worry about it affecting work.

[jedimaster91]

Where does that leave people like me, who get turned down for everything because I don't have enough credit?


Not even big things like cars, or houses, or other loans. I mean, I have a checking/savings/credit card through my bank. I want to switch to another bank closer to me. They declined me (while managing to tack on two inquiries to my credit report in doing so) because... (exact wording) "You don't have enough lines of credit." I have two credit cards. I guess they want me to pull out a few loans and a sign up for a few of those pre approved credit cards?

I ran into the same thing. I couldn't even get a Discover student card because I didn't have any credit. My parents paid my college tuition, so no student loans. Then I got married and inherited my husband's credit and cards. His credit is pretty darn good.