Should credit checks be used in hiring decisions?

Should companies use credit checks to help them decide whether to hire you?

AJC reporters Katie Leslie and Marcus Garner write that a growing number of people affected by record joblessness and foreclosure have a new worry: Will bad credit keep me from getting the job?

While the U.S. Equal Employment Opportunity Commission reviews testimony regarding the use of credit background checks for employment, supporters say the checks are a smart business tool. Critics counter that the reports unfairly discriminate against minorities and those affected by the recession, Leslie and Garner write.

What do you say? How much weight should credit checks be given? Are they relevant? Why or why not?

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414 comments Add your comment

Eric

October 27th, 2010
6:39 am

Credit checks have nothing to do with JOB PERFORMANCE whatsoever! It is a person’s own business handled away from work and should not be a part of any hiring decision (except financial lending appears justified), and therefore banned completely. Next thing you know, companies could discriminate based on health records, interviews with neighbors and friends, tax returns, etc. This is just another form of breach of privacy.

gapine

October 27th, 2010
6:39 am

How does a credit check unfairly discriminate against minorities?

Henry Unger

October 27th, 2010
6:45 am

Gapine: To answer your question, the reporters write that Sarah Crawford, senior counsel for the Lawyers’ Committee for Civil Rights Under Law, testified before the EEOC last week against the use of credit checks. Research indicates African-Americans and Hispanics tend to have poorer credit than whites, and credit background checks, when applied broadly, can have a second-hand effect of screening out minorities, she said.

TMA

October 27th, 2010
6:47 am

I do not think employers have an right or business filing through my credit report. They infringe enough already into peoples privacy looking at your MySpace and Facebook accounts as it is and other personal information.

What a person does when they are outside the workplace is THEIR business and employers have no business prying into it.

By the way, I do agree with companies doing background checks but I think they should only be allowed (in most cases) to only go back so many years. Five for instance. If a person got in trouble why back when they were a stupid teen or in their early 20’s should not have to come back and haunt them 20 and 30 years later.

But on the flip-side, I know there are states who have laws in place regarding background checks but I also know that most states are not required to tell you why you were not hired, so it certainly makes one wonder how far they went back anyways.

Lastly, Georgia is probably the most “employee unfriendly” state in the United States. Trying winning an unemployment appeal hearing in this state. It’s a joke. Both of the times myself and my wife appealed denial of benefits, we lost the appeal despite the mountains of admissible evidence that was accepted by the appeals judge.

Talk about getting bent over without using lube…..

Bryan

October 27th, 2010
6:49 am

I think credit has a lot to do with JOB PERFORMANCE. I wouldn’t want someone handling my companies money if they can’t manage their own! If you can’t pay your bills on time I am pretty sure you can care less about your job responsibilities. Credit is a reflection of one’s responsibility. People work hard to keep their credit clean. Just like someone works hard to get a Masters. No one ever forced someone to get a credit card and miss payments…just saying

me

October 27th, 2010
6:59 am

In the article there was the following quote “You have somebody who has fallen behind on their bills because they’re out of their job in this economy, and because they’ve fallen behind on their bills, they can’t get a job.” I disagree with this. They did not fall behind on their bills because they lost their job. I would say they fell behind on their bills because they had not anticipated such a thing happening and probably bought to big a house, had to much credit card debt and more than likely spent every penny they made in most cases. What ever happened to people saving some money for emergencies. I’m sick and tired of seeing these people losing their 200k-500k houses and come to find out that the mortgage payment was at least half of their net income. If you are paying more than half of your net income on housing then your an idiot and you deserve what is coming to you.

Bonnie

October 27th, 2010
7:03 am

Unless you are handling money for a company or some type of funds or in accounting type positions, I don’t see where a credit check should be run. That is an infringement on your privacy unless it involves your job specifically. If you write checks or drafts for say an insurance company, then yes your check should be verified to some extent. It has been way too easy in the past for people to provide themselves with income from a company’s cofer but to just answer phones, do administrative work, work on a sales floor, that type of thing, no it should not matter. At least you are working, if your credit is bad, and trying to make things better. Employers need to give people a break once in a while. It is hard times right now and people shouldn’t be marked as “irresponsible” if their credit is a little bad at the moment – it may not be their fault but the fault of unemployment and downsizing of companies that put them in the position they are in right now. Not everyone’s is fortunate enough to be working at the moment.

tim

October 27th, 2010
7:03 am

Bryan,

Enjoy your little utopian slice of life. Your logic is flawed; your premise blows. Want to know why? Do you? If we followed MR. Bryan’s reasoning all fast food cashiers would need a credit check. Yep, they handle company money. Good luck getting lunch out today! Pud…

Margaret Gray

October 27th, 2010
7:16 am

If a mandatory credit check would prevent UNQUALIFIED, Obama-loving, Affirmative-Action applicants who lack both the requisite skills and education from getting a job they haven’t even earned in the first place, my husband and I all for it.

shadow7071

October 27th, 2010
7:24 am

To me this is completely nuts. As a result of the economy here in Georgia we have around 500,000 people unemployed (maybe more). Obviously, many of these people have experienced some personal financial issues that has negatively impacted their credit score/history. So, now, we’re not allowed to hire them because they lost their job and got behind in their credit card and mortgage payments or worse. And what’s even more nuts is that some of you out there think this is being RESPONSIBLE. I ask, how are we ever going to get out of this recession and put these folks back to work if we start judging them on how their credit score. We used to judge people on the color of their skin. If you were black then you didn’t qualify. We used to judge people on gender. If you were a woman then you didn’t qualify. How many of you RESPONSIBLE, more holy than thou, people out there want to return to those days? Well, here we are again.

Fred

October 27th, 2010
7:26 am

People are angry. I’m angry. You better quit jerking the worker around because one day we may not serve you the lunch you need. Now,go back to your crappy cubical and realize you can’t provide for yourself Just kidding, I love my job The hours are crap. The pay is low. What a country!

Dan

October 27th, 2010
7:26 am

Credit should be one of several factors in the hiring decision. I’ve hired a number of folks over the years, and because of the nature of the job and industry I’m in we run credit checks. I can tell you that anytime we’ve made exceptions it’s backfired. Bottom line is this: the way people handle their business at home will absolutely translate into the way they handle their business at work. People don’t change when they are between the lines. Are there exceptions and outliers? Yes, there always are. But we’re talking about the masses.

nativeson71

October 27th, 2010
7:30 am

No I do not think a credit check or a good FICO score should be reviewed for potential employment. I have known several CPA’s who excel at their careers but don’t balance their own check books.

kellyjohnson

October 27th, 2010
7:31 am

Wait a minute Margaret…I thought you wanted all those lazy people to get a job. Now you don’t want them to work? I think you need to make up your racist mind about all this.

Tyler Durden

October 27th, 2010
7:33 am

I think future employees should run credit checks on HR people and the companies they represent.

Can you say Enron and Healthsouth? One of these days…

Bill Blount

October 27th, 2010
7:37 am

To answer your question, the answer is NO, credit checks have absoulutely nothing to do with job performance for anyone, but my question to you and all those like you is, who is regulating, and properly checking on the credit check agencies. I will bet that there are very few people that have erroroneous information in there current file. Anytime someone has as much power as they seem to exhibit should be regulated tighter than the banks, and we all have seen what has happened to our for profit banking system.

A.S.Mathew

October 27th, 2010
7:41 am

People with the highest credit score messed up their credit due to unexpected events in their
life; like sickness and lack of job. Discriminating them based on their poor credit rating is far
worse than robbing the refuges.

Chris

October 27th, 2010
7:44 am

Hate to pull up the rock you’ve been living under tim, but credit checks are run for those fast food employees that handle money.

Neil Beck

October 27th, 2010
7:45 am

Have you seen the news from France? That could happen here. Wait a minute; that will not happen here because we are sheep, lazy, well fed sheep.

Public Health Girl

October 27th, 2010
7:45 am

My credit score should only be considered when I’m trying to purchase a home or a car…etc..etc. and I’m not sure how this became a race issue, because bad credit has no color. However, it is a known fact that more whites file for bankruptcy than any other race.

In terms of employment. Many young professionals such as Doctor’s and Lawyer’s, find themeselves in debt due to student loans. Does this mean they shouldn’t be allowed to work in their fields due to some glitches on their credit? Lets go back to the old days, when people were hired based on their “ABILITY” and not on their facebook profile and credit rating……

tim

October 27th, 2010
7:47 am

Congrats Chris! I see you made it into the assistant manager training program. Well done! I would like fries with that please.

gristmill

October 27th, 2010
7:49 am

shadow 7071 says it best – kudos to you for explaining exactly the way it is

Chris

October 27th, 2010
7:51 am

That comment is about ten years late, but nice try.

tim

October 27th, 2010
7:55 am

So, I guess you are a manager now.

DanO

October 27th, 2010
7:55 am

If you have good credit then you’re pro credit checks. If you have bad credit then you’re against it. I think if the credit checks are being used then the companies should be required to spend the money necessary to properly evaluate each applicants report and give a detailed evaluation of why they were not considered for the job. I’m against using a credit score only to make the decision. As an industry the credit reporting companies have clearly labeled themselves as incompetent. What if you credit was perfect until six months after you lost your job. Seems to me that you were in fact more responsible than most if you had six months of reserves before the wheels started coming off. Side note: Get your college transcript it your seeking work. My college had no record of my graduating (computer glitch). I had to physically bring them my copy of my transcript and my diploma. Sounds farfetched I know but it happened.

Chris

October 27th, 2010
7:59 am

Got out of that business nine years ago, when I joined the Army after 9/11.

First Sergeant

October 27th, 2010
8:00 am

Bryan

October 27th, 2010
6:49 am
“I think credit has a lot to do with JOB PERFORMANCE. I wouldn’t want someone handling my companies money if they can’t manage their own! If you can’t pay your bills on time I am pretty sure you can care less about your job responsibilities. Credit is a reflection of one’s responsibility. People work hard to keep their credit clean. Just like someone works hard to get a Masters. No one ever forced someone to get a credit card and miss payments…just saying”

Bryan,

According to your analysis, Nathan Deal fits the category of not handling his finances, and therefore, reflects on his lack of responsibility, Right?

My question then, why are you Georgians considering this person to be your Governor?

GFOS

October 27th, 2010
8:02 am

I agree total with the comments from Public Health Girl and yes you are so right bad credit has not color. Bankruptcy we all know who are the top of this list for filing than any other race on this earth.

Chris

October 27th, 2010
8:04 am

Student loans aren’t the type of debt that’s going to disqualify you for a job. It’s that 60k credit card bill that is.

DanO

October 27th, 2010
8:05 am

First Sargent TOCHE`!! My friend

DanO

October 27th, 2010
8:06 am

Oops Touche`

tim

October 27th, 2010
8:08 am

We can’t all be government workers.

DanO

October 27th, 2010
8:09 am

Not so fast GFOS ! Whites are at the top of every list because we are 70% of the population.

Public Health Girl

October 27th, 2010
8:14 am

@DanO.

what’s your point?

greg Middleclass

October 27th, 2010
8:14 am

Credit checks do one thing and that’s make sure the rich get the good jobs, if you have credit cards in college and spend a little to much and then pay late you have bad credit, but if you are Biff and the parents are rich then they pay the bill, so Biff will always get the job, they came up with this scam of checking credit when they saw the job markets were getting tighter and had to make sure Biff got the job with his “d” average in college against a middle class kid with ‘A’s. More to the rich, god bless what used to be America. Anyone tells you different ask what their parents make a year.

George Bailey

October 27th, 2010
8:19 am

Sorry, but I have to agree with Chris. I work in HR, and we look at the overall history of the report, not just the last 6 months to a year. Hospital bills and Student Loan debt are not considered to be negatives as they are legitimate expenses. However, the employee that is applying for a job that has a history of missed car payments, past due utility bills, late mortgage or rent payments, late credit card payments, etc… are looked at negatively and for good reason. I’ll put it this way, if you don’t care about honoring your responsabilities to the people that have extended you money and credit in good faith, whay would i ever think you eill honor your commitment to me as your employer under the same circumstances? And by the way,I’ve had to go through a credit check at every job I’ve ever worked at, and never worried. Even with several lay offs and job eliminations under my belt.

Chris

October 27th, 2010
8:19 am

Right. It’s all the rich people’s fault.

Where should that go on a resume? Under the lack of qualifications, or above?

Bo U

October 27th, 2010
8:19 am

It is so SAD to use a credit rating to hinder a person from getting a job…those with good credit get a job and later steal….maybe the person has bad credit because he or she can not get a job because of credit checks…..STUPID thing and needs to be stopped!!! My credit has gotten bad because I was laid off and could not pay everything on time…I am sure this hinders me even though I am a college graduate….

tim

October 27th, 2010
8:22 am

Just love our perfect world.

Double Zero Eight

October 27th, 2010
8:22 am

As a previous blogger said, this would theoretically disqualify Deal from becoming governor.

greg Middleclass

October 27th, 2010
8:22 am

First Sergeant is right on as well, Deal is scum and fits right in after Perdue, land deals and spends all of his time in the lap of road builders and insurance companies. What’s with the grand jury letting that other scrum bag from Gwinnett off the hook if he resigns, throw the book at that crook and he can serve whilst in prison. Gwinnett needs a good old fashion tar and feather, the 31’st would be a great night.

J

October 27th, 2010
8:23 am

A credit check allows an employer to see how you handle your affairs with the outside world. I hate to break it to you guys but every single person in law enforcement, firefighters and county employees (at least in cobb) all get credit checks. The type of person that forgets to pay bills on time is the same type of employee that fails to do lots of things obvious to all of us that pay our bills like we should. Granted a foreclosure or such isn’t going to hurt you, but crappy mishandling of your affairs does let the employer know that you most likely will not handle his affairs any better.

gristmill

October 27th, 2010
8:23 am

yeah greg Middleclass you aced it too

George Bailey

October 27th, 2010
8:24 am

Bo U, so what your saying is that you’ve been laid off for the last 5 years? because that’s the typical timeline that we look at. As i said, 6 months to a year is the accepted period for racking up debt due to being out of a job. Anything beyond that indicates that even though you were employed, you still didn’t honor your commitments.

Robbie

October 27th, 2010
8:24 am

I WOULD like to think that everyone would not want poor credit to the be deciding factor for employment. My credit is not the worse, but its not close to the best either. I WOULD love to believe that people are given employment opportunities based on ability and skills. I am in middle management and let me tell you, when I first started working for my company my credit was horrible, but it had absolutely nothing to do with my work ethics. If one is not applying for a job within the financial division of a company, a credit check should not be performed. And it should be obvious that many of those with poor credit are not the problem. They are not the ones stealing the money just ask the CEOs, CFOs, corporate accountants and, so on and so forth. They have millions of dollars but their greed supersedes quality job performance, task completion, dedication and etc.

Are you guys serious about CCs being done for fast food employment??!!! Can you imagine how screwed some children are? Their parents have ruined many of their credit ratings already; and this is regardless of race, they can be white, black, yellow, green or red. Poor kiddies, welcome to the American dream!!!

professional skeptic

October 27th, 2010
8:24 am

Credit checks DEFINITELY should be run on all job candidates when the position in question involves access to money, or serving in a financial or leadership role.

This would include candidates for Governor.

IT'S MORE WHITES WITH BAD CREDIT NOW!

October 27th, 2010
8:25 am

EVERYBODY CREDIT IS MESSED UP SINCE BUSH DESTROYED AMERICA!

Taking Away My Rights

October 27th, 2010
8:26 am

1. Unless its a job that has to do with Finances a credit check should not be performed. Even if there is a problem in the report and you have a good candidate this information should be discussed before just firing that person.
2. What about privacy? I had a credit check for my current job as an administrative assistant? I don’t handle money at any time. Why is there a credit check.
3. What goes on in my house has nothing to do with my experience and work performance. How can people pay off there debts if they can’t get a job.

DanO

October 27th, 2010
8:26 am

“However, it is a known fact that more whites file for bankruptcy than
any other race.” Blacks 13% of population Whites 70% of population. So if 13,000 (10%) Blacks and (10%) 70,000 Whites file for bankruptcy then we are dead even in bankruptcy filings. (as a percentage 10%) I understand that this is not the most accurate example but on short notice…

Robbie

October 27th, 2010
8:28 am

Sorry guys, I have a corrections. I meant to say a credit check should be performed if one is applying for a job within the financial division of a company. Or least considered. But for all other employment I don’t think so. The fear of of jail far outweigh the excitement of having ‘free’ (i.e stolen) money at my disposal.