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
G.Rhone
October 27th, 2010
8:28 am
Indirect discrimination if you ask me. How can a person pay creditors if employers are basing their decisions on “credit?” Are you serious? Our own country is in debt to the tune of a trillion dollars. Especially when corporations are steadily going under, or they say.
We should do a credit check on corporations to ensure our 401K’s will be managed properly, our SS won’t run out and that they won’t blame everything on the “mortgage” crisis….come on!
Trust in God! Because Man “aint bout nothin!”
George Bailey
October 27th, 2010
8:28 am
I guess by the reasoning on this board, it should be considered discrimination if someone doesn’t have a college degree. Afterall, a higher percentage of whites have a college education compared to blacks and hispanics. And for that matter, why should I be denied employment becuase I don’t speak spanish?
HR
October 27th, 2010
8:30 am
Credit checks when they are properly reviewed are a great tool to determine employment. Most companies review the detailed report and not just the credit score. Companies also look for patterns so a medical bill or a student loan may not effect a company’s decision. We are also aware that the economy is very tough therefore over the past 2 years someone’s credit may have declined. Again patterns are the key….if you have had poor credit for years upon years the employer is correct when assuming you could potentially be a threat to the company’s assets.
George Bailey
October 27th, 2010
8:31 am
Right on point HR!
Peadawg
October 27th, 2010
8:31 am
“Research indicates African-Americans and Hispanics tend to have poorer credit than whites”
Ok and who’s fault is that?
Georjajim
October 27th, 2010
8:32 am
George Bailey has it right. Thanks for saving me a lot of typing.
Public Health Girl
October 27th, 2010
8:32 am
So a convicted child molester or drug dealer would have a better chance of landing employment over someone with a few missed payments? what kind of world are we living in!!!!????
The credit report being a good indicator of success on the job, is about as silly as Damon Evans having to step down from his positon, for driving while intoxicated with a white girls red panties in his lap…..
greg Middleclass
October 27th, 2010
8:32 am
George Bailey I have never meant a HR person that was not a lying scum bag only out to protect management, I have been working at large companies as middle management for years and HR sit around building a case against someone the boss does not like or wants to replace with a relative or friend of a relative. The person could be a great worker but out they go with some lame excuse, you can tell who replaced the hard workers just by reading this blog. Oh and I do blame the rich, who has all the money dope, like the conservatives give a rats behind what happens to the middle class, what a joke..
DanO
October 27th, 2010
8:36 am
Reread my post. Man I screwed that up !! My point was that you can’t just look at the shear numbers. If you looked at the number of white’s that filed for bankruptcy alone then your conclusion would be that the recession hurt whites more than blacks. I don’t know anyone who thinks that’s true.
One Nation Under educated
October 27th, 2010
8:37 am
“She never knew of an applicant denied a job because of his or her credit.”
Did you catch that in the article? I did. That’s what a lawyer tells you to say on the stand, so you can lie and not perjure yourself “not that I know of….”, ” not that I recall…”. People don’t talk like that in honest conversations.
It is absolutely, positively a blatant violation of your 4th Amendment rights, if we have a Bill of Rights anymore.
Public Health Girl
October 27th, 2010
8:39 am
@DanO.
I see your point. however, if that were true. then whites would be number one in new reported cases of HIV/AIDS. you would be most likely to die in white on white crime. you would be most liekly to go to prison. you would be most likely to depend on welfare, be a single mother, etc..etc…
slickwillie
October 27th, 2010
8:39 am
I can understand credit checks and background checks for people who handle money, large accounts, or budgets for specific sections of a business. This could give the employer an idea of the subjects personal management skills and budgetting skills. I do not believe the credit score tells an employer anything about work performance however, your best employee could be losing you tons of money because they simply cannot keep a budget very well or they are even stealing to take care of their own bills. I worked in restaurant management for a period of time and had a few instances where other managers or staff would steal money to pay their bills.
If employers are going to use credit scores as deal-makers or breakers, then the potential employee should be given the opportunity to discuss/defend their credit report.
George Bailey
October 27th, 2010
8:40 am
gregMiddleclass – Wow, you make some pretty big assumptions. 1. I said I work in HR, I never said in what capacity. If you must know, I’m a consultant and I advise companies nationwide on PROPER employment procedures. i.e. DO NOT FIRE SOMEONE UNLESS THERE IS LEGITIMATE CAUSE. I make it clear to my clients that I will not work with them if they try to “cheat” the system. 2. I never said I was a conservative, actually I’m not affiliated with either party, and I rarely vote, because most candidates suck anyway. 3. I must have a job becuase my parents are rich. LOL! My family comes from 3 generations of Moptana ranchers and farmers.Pretty far cry from being a Kennedy. I’m going to make an assumption about you that tells me that it’s your credit history paired with your attitude which has probably kept you unemployed.
Chris
October 27th, 2010
8:42 am
Claiming that a convicted child molester would be more likely to be hired than someone who has missed a couple of payments?
I see you’ve missed the carpool to reality this morning. Luckily, the bus is still running. Be sure to catch it.
Greg – who is rich? What is that definition?
Earning It
October 27th, 2010
8:43 am
HR and George Bailey are correct. You assume that the person reviewing the report is going to be able to tell the difference between falling behind on bills due to unemployment and racking up unsecured debt then walking away from it. In a detailed credit report, it is fairly easy to tell the difference between “hard luck” and “deadbeat”.
Bryan
October 27th, 2010
8:44 am
Public Health Girl – So a convicted child molester or drug dealer would have a better chance of landing employment over someone with a few missed payments? what kind of world are we living in!!!!????
This is crazy talk! Have you never heard of a criminal background check? What company do you know has hired a child molester over someone with a 550 FICO score?
greg Middleclass
October 27th, 2010
8:45 am
Credit checks do nothing but make sure that those with means get the jobs against those without, as I said before, our countries greatest growth was done without credit checks being done for 80 years, but once the labor market became tight now we have to have them to measure a persons character, my butt. It’s only there to insure the lazy rich kid Biff gets the jobs over the middle class kid who worked his butt off in school. Yes I resent the super rich who have only gotten richer and kids becoming upper manage management at 30 because their father went to school with the CEO. I also think that any CEO that moves the jobs to a commie country is a commie lover and is greedy and should be called out for what they are, if this was 1950 they would be tried for treason..
George Bailey
October 27th, 2010
8:45 am
I’m pretty sure a candidate with a conviction on their record would be declined before someone with bad credit Hopefully it would be a choice between the child molester, the financial delinquent and the candidate with a clean record on both sides with experience. If companies are only getting convicted felons and deadbeats, they are obviously looking in the wrong place.
Clay
October 27th, 2010
8:46 am
The reality is there are more people looking for jobs than there are jobs so employers can and will do whatever they want to do to get the people they feel are the best to work for them.
Truth Hurts
October 27th, 2010
8:46 am
If you cannot manage your own personal finances why would an employer want to hire you? There are too many other applicants who have managed their personal finances and are not deadbeats. Why take on unmitigated risk?
Georjajim
October 27th, 2010
8:46 am
George Bailey I would want to work with you. Plus I think Montana is the most beautiful place I have ever seen. Yes, I thing GregMiddleclass needs to lay off the coffee. I know I wouldn’t hire someone that resentful and angry, and that would be picked up in an effective interview. I wouldn’t even have to do a credit check. The attitude check would tell me all I needed to know.
Sylvie
October 27th, 2010
8:48 am
The problem with credit is that it assumes everything stays the same; nothing ever does. After an 18-month period of unemployment during which I pieced together a living doing various part-time and odd jobs, my ability to pay the obligations I had made evaporated. After three years on a full-time job, I still don’t earn enough to pay all the things that need to be paid and save enough to pay of my debts. I feel horrible about it and would like to pay off all debts. It’s a terrible cloud hanging over my head. But it’s not like some of you think — that people with bad credit situations are living beyond their means and are just plain irresponsible. Now that I’m working, I budget ferociously to be able to meet the essentials and pay bills on time. I have no credit, except a car note that I’m just about to pay off. I’ve learned a lesson about credit. Unfortunately, it’s too late for my credit file. I’d never want to be judged on it. I’m better than that. Employers should never use credit info to deny someone the ability to prove themselves on a job, even those who handle money. A criminal background check should tell them everything they need to know about someone’s pertinent history.
Name (required)
October 27th, 2010
8:49 am
@TMA – Give me a break! If you think your privacy is being violated by someone “filing through” your Facebook or MySpace account, why do you have those accounts in the first place? If you have stuff to hide, why are you posting it on the Internet?!?!!? That is the most idiotic thing I’ve ever read.
Truth Hurts
October 27th, 2010
8:50 am
Peadawg,
They will probably tell you it’s “The Man” that is keeping them down rather than looking in the mirror…….
DanO
October 27th, 2010
8:50 am
Its probably true that more whites are on welfare. More whites are single mothers. More whites have hiv/aids. More whites are in prison…
(Well maybe not that one) More white on white crime all probably true but thats only because there’s 5x more of us. Living in a urban area we are prone to looking at race differently. There are large portions of our country where very few minoritys live. Upper N.Y,Upper Mich,Wy,Id,Nb,VT,NH,MT,WI just to name a few.
greg Middleclass
October 27th, 2010
8:50 am
George, by you going on the defensive about your work with HR departments tells me that you have indeed seen the very shenanigans going on that I wrote of, and no I am fully employed in the IT field but on a three day work week, I have another year in my contract and then I join all others suffering because of Wall Street greed and a corrupt uncaring congress. Every time my boss used to call me in to build a case against someone who really cared I wanted to punch him in his lazy butt mouth.
George Bailey
October 27th, 2010
8:50 am
gregMiddleclass, what are you smoking, and where can I get some? So, my father got his job working in Aerospace back in the 50’s not because of his Masters in Chemical Engineering and his abilities, rather because he was super rich growing up on a dirt farm in Northern Montana? And then due to his vast connections, I was able to get a job in Atlanta when I moved here 20 years ago not knowing anybody or anyone and having no ties to the Southeast?.
Chris
October 27th, 2010
8:51 am
Again, what is rich?
Because I’m wondering how I got a job if only the lazy rich kids get them.
Jimnalph
October 27th, 2010
8:53 am
Unless the employee would be in charge of accounting or handling money a credit report is not justified. It is one of those things that just because we have the technology to have it done quickly and inexpensively, does not mean it should be done. The parameters for getting a job should be tied directly to the job.
Patrick
October 27th, 2010
8:53 am
If I was an employer and had prospective employees, I would check their credit history if their job required them to handle money, including cashier, accountant, or any other job that involved handling my company’s money. Statistics have shown that people with bad credit are more likely to steal from their employer in order to have extra money for paying down debts.
SB
October 27th, 2010
8:53 am
I am really digusted as to why race has to always be bought up in a civil discussion. To, Margaret Gray please hang your self with that Affirmtative Action rope that benefits you most.
Public Health Girl
October 27th, 2010
8:53 am
@Bryan. I used to work with a guy who raped 2 little girls when he was 15. juvenile records as you know are sealed, and can’t be viewed. and not all jobs perform background checks………….
instead of finding ways to eliminate people from consideration, why not find ways to employ qualified individuals. I’m sure all the ladies that have come under question lately for improper P-card usage underwent and passed an employer credit check, but that didn’t stop them from being irresponsible…………..with ther employers funds.
Taking Away My Rights
October 27th, 2010
8:55 am
Again, credit reporting should not be considered unless the job is of a financial nature. Our society is so hypocritical now. The only people that would say its ok are the ones with good credit. Even if you look at a five year history that tells you nothing about that person. You learn a person by communication not by looking at data on a sheet of paper. And when they decide not to hire you, they will send you an email or a letter in a mail. There’s no communication anymore. You can’t even fill out an application in person anymore. NO CREDIT CHECKS!
George Bailey
October 27th, 2010
8:55 am
Sylvie, just to let you know, that I have always recommended to my clients that if they have a candidate with a negative credit history to allow them an opportunity to submit a written postion statement detailing the negative marks on the report. Unfortunately, very few candidates seem inclined to do so. I don’t know whether it’s becuase they can’t or if they simply can’t be bothered to take the time to justify their position.
LOLx2
October 27th, 2010
8:56 am
Ha ha ha This is crazy so what do we do with employees that are hired with a score of 700 and over a period of time their credit scores drops due to unforeseen financial difficulties (unexpected hospitalizations, car transmission replacement, absorbing health care for elderly parents, etc) Should they be let go? Would you mind your employer checking your credit 2-3 times a year to see whether they are going to let you go if your score drops.
Heck the company I work for has trouble paying its bills..lol Should a company that has trouble paying its own bill be checking whether a potential employee pays theirs? Think about this a bit more.
greg Middleclass
October 27th, 2010
8:57 am
Chris If you own an airplane, three houses, take a world cruise every year, fully pay for three kids to go to Yale and have a girlfriend on the side who is fully supported by you and you have so much money your wife does not notice the money going out, the you are rich and also the same person that will their employees no raise this year due to having to complete against a world wide work force, heard that one before, or my specialist practice does not make enough money to pay for health insurance for you workers, heard that one before??
Danny
October 27th, 2010
8:59 am
Credit Checks are already invasive enough. Jobs should be outlawed from performing credit checks UNLESS you are dealing with money such as a bank, financial advisor, etc. However to get a job as Sales person or teacher, what does credit have to do with anything. And for those folks that think their credit is high and might. One thing to think about is Identity Theft. I know quite a few folks that fell victim of it and one that happened one week ago! They opened a bunch of credit cards in their name. And getting this resolved is not a walk in the park. This is another reason why I think this credit checking stuff is getting out of hand. It is VERY easy to put stuff on your credit but yet very hard to get it removed. A creditor can access and put whatever they like on your report, I just spent time removing stuff o my report that I NEVER owned or do I have a clue where it came from. Just this alone shows that there is not process in place.
Employers should go off references since those are the most relative sources to performance of a job, if you were fired, are lazy, bad attitude, etc. Most background checking companies will call your HR department not the person that you designate since HR has your personnel file.
tim
October 27th, 2010
8:59 am
Chris, You deserve all the benefits, perks and pay you earn. I notice how America doesn’t give enough credit to the military. However, if all of the fast food workers stayed home for a week; this nation would fall on it’s rear end. Sales tax, payroll taxes and the economic multiplier would be vacant from the system that pays you. After all, you work for me and every other AMERICAN taxpayer. If a protest like this happened in the future and a federal order was given for me and my comrades to go back to work; what would happen? Retail workers don’t a free house if they get shot during a robbery attempt. Retail workers don’t get media fundraisers if they lose a finger in kitchen accident. Retail workers don’t get preference on anything. .You guys can’t understand why we don’t give a damn? If we were face to face on a picket line and your c.o. gave an order to shoot; would you shoot me?
George Bailey
October 27th, 2010
9:00 am
LOLx2. I posted earlier that medical bills and student loans are not considered to be negatives on the report. However, a blown transmission can be financed, and usually minimum payments can be made. what is telling, is that the person had a blown transmission, financed the repair either directly or on the CC, and then failed to pay for the work even though they were employed.
My two cents
October 27th, 2010
9:02 am
In June of 2007 my credit score was 750. I was married, just sold my house, had a great job and was relocating here. By November of the same year I was seperated, fired and carrying all of the bills by myself. I have been unable to find another job since November 2007. As a result, I have had my vehicle reposessed, all of my bills reported to an agency and my excellent credit score is now poor. What gets me is how the current credit score is not looked at as the abnormality. People do not seem to say oh this is the type of person they were before they lost the job. To me, the job performance, and the references that I have should carry more weight with a potential employer than my credit score but I suspect this is no longer the case.
George Bailey
October 27th, 2010
9:03 am
Danny, in my post to Sylvie I did say that I always gave the candidate the opportunity to defend their position. If identity theft did occur, then they can produce documents showing that. However, more often than not, the candidate simply goes away.
Georjajim
October 27th, 2010
9:04 am
GregMC….go ahead and jump off a building now. I don’t think you can be cured. And please don’t do it during rush hour, as the police and fire vehicles will delay all of us rich white kids with jobs getting home in time to swim in our pool, relax in the sauna before cooking lobster to watch the World Series in our media room. Thanks!
George Bailey
October 27th, 2010
9:05 am
Georjajim – You have a Media Room? Damn, you are rich!
One Nation Under educated
October 27th, 2010
9:08 am
George, is the “consulting” business so slow in this supply-side jesus economy that you had to take this job paid-blog-posting as an advocate?
For the un-initiated (bend over), there are two paid posters on here – advocates. That’s you first sign that even they know its wrong. Truth doesn’t need an advocate.
I’m a financial Controller, and this is isn’t even close. Its so blatantly wrong, the companies know its wrong, they’re just gonna do it til somebody rightfully sues them and wins.
Advocates, you think they’re going to invite you to the yacht club this weekend?
Palin fan
October 27th, 2010
9:08 am
Credit and health history should be checked before someone has the privilege of a job.
With the high unemployment, no lazy Obama-loving types with type-2 diabetes who don’t pay there bills should be taken jobs away from decent, hard working real Americans.
Public Health Girl
October 27th, 2010
9:09 am
A credit check should only be done if you’re trying to gain employment at one of these three places:
1. EQUIFAX
2. TRANSUNION
3. EXPERIAN
PR
October 27th, 2010
9:09 am
It all goes back to PERSONAL RESPONSIBILITY! If people would have been financially savvy with their money and SAVED for the rainy day that is HERE, then you would have been able to pay your bills in spite of longterm unemployment.
I cannot believe that some of you had no idea this practice had gone on for years in many employment sectors. Face it folks, you can’t all of a sudden call FOUL now becuase you don’t like the rules. Hopefully this realization will force people to finally start thinking about how they are ruining their lives with poor decisions.
The personal responsibility factor is going to play a huge part from here on out. You can’t escape poor personal financial decision making.
Barney
October 27th, 2010
9:10 am
Heck yea ,it eliminates the deadbeats in the pool of applicants.Why shouldn’t someone hire the best person for the job?
Umemplyed Atlantan
October 27th, 2010
9:10 am
When I first heard that credit scores are used in the job hiring process, I flipped my lid. I know my Credit isn’t horrific, but it is not all that great as well. I think it’s so unfair, against my human rights for a job to go a check my credit. Only a few circumstances will I understand, maybe working for the Presidents protection, handling money, or working somewhere were good credit is needed and I’m yet to find a place like that. But employers should keep their nose out my personal credit reports.
Name (required)
October 27th, 2010
9:12 am
Hey Palin fan,
It’s “their” not “there”. I know you teabaggers aren’t the smartest grapes in the bunch, but please at least obey basic grammar rules.