Why do companies do credit checks on potential new employees?

[blueamy66]

I think it's BS.

If someone owes money, they obviously need a freaking job.

Sure, do a background check, but a credit check as well????

My guy is currently employed, but is looking around. He has some "bumps in the road" on his credit....if it affects the chance that he could be hired, I am gonna be really pissed.

[HopeHoops]

1. They're only looking for people who don't need the job.

[blueamy66]

2. oh, okay, gotcha

[Generic Brad]

3. It depends on the job being applied for

If you are hiring someone who will be responsible for managing your company's money, then it makes sense. That could be risky for the company. But for the majority of jobs out there I don't think it should be necessary.

[blueamy66]

6. I can see if he was asking for a bank job....

I guess I can see your point. But like you stated, for the majority of jobs, it really isn't necessary.

[Populist_Prole]

4. It's just another flaming hoop to make applicants jump through in a tight job market

They're picky and want you to know it.

Same reason some don't like unmarried people. Or older people. Or why they want you to take those idiotic Myers-Briggs "tests" to weed out everybody but the hand-pumping, palm pressing phonies with that winning smile.

[blueamy66]

5. Exactly.

He's not too old, but in his early 50s...don't know if that matters.

Some of those "tests" are 100+ questions. To manage a Taco Bell? Really?

I think he's got this job in the bag....if he does get hired, I will be in Seventh Heaven....no more traveling, great opportunity for advancement, alot of perks and exposure and a good salary.

Asking for good vibes!

[fbguy_144]

29. +1

excellent post

[csziggy]

40. It's not a recent development - over twenty years ago

A business my husband applied to work for wanted not only to credit check him but they wanted a financial statement both for him and for me as his spouse. I refused to let him complete the application. It was my husband's decision if he wanted to give out his own information but the company had no right to know anything about my financial status since *I* was not applying for a job!

[MrsBrady]

7. sometimes they say that, but don't run it

it scares some people off.

I would just apply and not worry about it.
The company may not actually spend the money to run the report.
It costs the company money to do that.

I worked as a recruiter, and my company only ran that
stuff after someone was hired or chosen...
if they ran it at all.
I thought they ran background check and credit, etc...but they didn't.

The company might run it, but it's possible they won't.

[Major Nikon]

8. Here's what you need to know about it

If a company runs a credit check on an employee, that employee has a right to know if that information was used adversely against them per the Fair Credit Report Act. I don't remember if they have to give this information to you, or you have to request it. Either way it's available.

Because of this, many companies will not run credit checks on all prospective employees. The reason is because if an employer doesn't have a good reason for excluding employees based on their credit, they can run into problems with prospective employees filing civil rights complaints since minorities often have worse credit than non-minorities.

[blueamy66]

10. interesting....than\k you for the info....

nt

[LishaD35]

9. I was told they would run a credit check on me to work at the library

in the art, music,and media department.

My credit is not that good right now, but I figured that if I said no they wouldn't consider me.

[blueamy66]

11. but why?

are you gonna steal some books and sell them to pay your debts?

Makes me want to move to Alaska and tend bar in some dark, unpopulated place.....

[LishaD35]

15. Yes, that was my plan,

but it was foiled by a credit check.

[Chan790]

32. Interestingly, libraries are one of the few fields where I've been told they always run the reports.

Last edited Mon Sep 10, 2012, 11:11 AM - Edit history (1)

Also, many people don't know this...libraries are allowed to report excessive late fees and non-returned materials to credit-bureaus; I learned that when I lost a copy of Ulysses from the Philadelphia Free Library and took my time reporting it or paying for it because I was destitute and moving back into my parent's attic.

That ended up being a funny story, I called them irate when I saw it years after I paid them on my credit report and ended up having a long conversation about applying to their library-sciences graduate program because it's a free Masters of Library Science degree...you work in the library while going to their school for 3 years and agree to work for them for like 5 years post-graduation as a librarian. They take like 4 people a year.

The reason they run the reports at the library is actually exactly the reason you've cite though...most libraries have things like special collections, CD/DVD centers, rare book rooms, etc...people with bad credit are more likely to be people who do things because they need money like take home DVDs to make copies to sell (library copies are typically different than retail versions and are often traceable...the way the library usually determines who the pirate is is via borrowing records so untrustworthy staffers take them off-the-system to copy. If the library cannot determine who pirated the film, some jurisdictions allow them to be held liable for the fines and damages); steal computers, rare books or antiquities (from the special collections); "fix" people's lost-book records for bribes; also it's not uncommon for all staffers at a library to be a key-holder. So it might seem unfair but having bad credit is often a sign of irresponsibility...less so now than in the mid-90s when I lost Philly Free Library's copy of Ulysses.

[LishaD35]

41. Thanks for the info.

You learn something new everyday. Especially here.

[BlueJazz]

12. I've posted this before: And what happens if someone's identity is stolen...

(as a lady I know now).

Her credit is shot through no fault of her own.

[blueamy66]

13. it just seems like "you" cannot win anymore

ugh

[NV Whino]

14. I just bought a car

For cash. (Not that I'm that rich, but I got a good insurance settlement from an accident.) Damn fool salesman wanted to run a credit check. I did let him only because I knew it would be good.

[blueamy66]

16. You are kidding me, right??

Really????

[NV Whino]

17. Yep

He also asked for my yearly income. I told him it had no relevance to our transaction.

[blueamy66]

18. Did you walk out?

nt

[NV Whino]

21. No, I bought the car

He doesn't, however know my income.

[AmyDeLune]

19. A friend of mine years ago

bought something small and inexpensive from Radio Shack. She paid cash and the clerk asked her for ID. She refused, saying "It's CASH!"


splenning

[yawnmaster]

20. they want a credit check and your yearly income, etc...because...

then they know how much you have and it becomes a negotiation tool.
(unless you already negotiated a price for the car, then I have no idea why they wanted it)

Always negotiate price before filling out any of their bs forms.

[NV Whino]

22. Yeah, we already agreed on the price

We did that over the Internet.

[Initech]

23. There's a few states pushing to make this illegal.

I think California has been working on legislation as well as New York and a couple of other states.

[blueamy66]

25. Good, cause it serves no purpose IMHO

nt

[Initech]

26. I completely agreed there.

[Ikonoklast]

24. Some of the reasoning used is that a person under financial stress

might be more likely to steal from an employer.

At least, that is the rationale I heard from a couple of HR sources.


And that means more than just a couple of late payments here and there.

The stuff they want to find out is if the prospective employee has large outstanding credit balances, repossessions, garnishments, judgments, bankruptcies, that kind of thing.

[blueamy66]

27. Well, he is being garnished....but is that wrong?

He's got a kid. Are they gonna fault him for paying child support?

I doubt this new company will do a credit check....she just threw it out there...he told her that he pays support...

We shall see.....

My guy said that she was cute and that she liked him....he cleans up good

[Ikonoklast]

28. Don't think that being garnished to pay child support even rings the bell.

In many states, that's how it's done from the get-go, anyway.

NOT paying child support might, however.

[blueamy66]

30. well, he's current and has been paying....

so not gonna be a problem...just hope the job comes thru and these "background" checks are okay

it is tough these days.....

[harmonicon]

31. It's just one more way to keep the poor poor.

That's how I see it at least. I know people give other reasons, but they don't ring true.

[Art_from_Ark]

42. That's the way I see it, too

Just another hoop for poor people to try to jump through, and when (if) you finally get a minimum wage job, you better appreciate it, dammit!

[Kali]

33. the same reason they piss test ditch diggers

because they can

surely you don't expect to be treated with dignity and respect, do you? you should learn to LIKE being treated like a criminal for no reason.

[blueamy66]

34. true that

it just sux

[blueamy66]

35. Well, he's officially been released to work again at his current job as of today

Yee Haw!

But if he gets an offer from the "new" job, he's taking it!

Kinda happy here in AZ.....Amy

[ksoze]

36. Any data is helpful when hiring and sometimes required

Sorry, but hiring is something that is taken with as much seriousness by the employer as the prospective employee. Credit and criminal checks are also sometimes required for workers who may interface with schools and other areas which require this from the contractor. Every employer is looking for as much information as they can to help paint a picture of someone who they are going to make a financial commitment to. That could include looking at social media sites, etc. No one is looking to not hire someone, but to gain as much insight into the person as possible. The credit check can simply add to the overall picture of a candidate and alone is not a job killer for those whose credit is tricky. Bumps in the road credit wise should not hurt a prospective employee and his experience and personal effectiveness will trump any small credit issues.

[blueamy66]

37. but what about the "little guy/gal" who has had a tough life and is trying to turn it around?

are they just screwed?

[Populist_Prole]

38. I've been following this thread in the hopes of a good outcome. Do let us know.

Work just isn't about income/money; it's about one's pride, their "heart" their need for self worth: and it damned should NOT depend on high-handed or whimsical desire to throw up brick walls in order for some jerkoff to feel he/she has the upper hand.

All the best.

[blueamy66]

39. Thank you soooo much.

You brough joy to my heart.

He's officially back to work, but, like I said, if he is offered the new job, he's definitely gonna take it. They seemed to really like him and if he gets to stay home and not travel....yee haw!

He does have pride....alot of it....and he has felt like crap for the last 3 months, not being able to work. He's been working since he was 14 years old. I don't think his relationship with his boss will ever be the same.

I'll keep you posted...and thanks again....