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
Gov
October 27th, 2010
2:19 pm
I am a perfect, more than perfect credit report holder.
I was so offended with Manpower employment agency for demanding to check my credit history.
Manpower was rude to the extent of nearly asking me to walk out if I didn’t concent to the credit check.
Phone taps by gov
Online tracking by banks, advertisers, every agency
Naked search at Airport
Naked scanning search at the airport (they say it’s professional trained people). 5 to 10 years down the line the standered will degrade and the so called professionals will be laughing at bodies etc…
Now credit checks for employment.
People get jobs because they need money to survive. Gets jobs to better their financial situations. Now there is no job for you if your are financially bad, LOL.
Phone companies, Cable companies, Credit card companies, Medical companies, collection agencies charge you with no bounds and just reason and when you don’t want to pay i’ts an endless customers problems resolving lines, none picksup the phone, so, no credit issues get resolved. Credit bureaus are the WORST to ever try to resolve an issue, THEY NEVER PIC THE PHONE, CAN NEVER GET TO A PERSON. So, how is the consumer 100% responsible in the first place if for bad credit when there is no way of resolving it without givingin to mafia style demands?
Really?
October 27th, 2010
2:25 pm
I worked for a property investment/management company and they have let properties go back to the bank not because they could not pay them anymore but because it was no longer a good investment. I also worked for a similar company that filed chapter 11 bankruptcy protection right after they paid out $1.5 mil in corporate bonuses. I consider myself level headed but doesn’t anyone think that it is hypocritical to credit check potential employees for responsibility and honesty when stuff like this is par for the course when it comes to doing business in corporate america? Life is never fair but REALLY? Companies never seem to hold themselves to the same standards that they hold their employees. I concede that it may be a good tool to judge potential employees but the double standards cannot be ignored.
angela
October 27th, 2010
2:37 pm
of course, i barely skimmed all the comments here, BUT, for all of those who inhale a sense of entitlement, credit/indebtedness is a luxury, not a right. Americans need to start living within their means. That way, when the economy DOES crap out, you aren’t crapped out with it. It’s not a “Utopian” idea, it’s simply called responsibility.
So, in this great country we live in, your corporate “government” has every right to do a credit check. They want responsible employees. Being debt free is a pretty good indication of a responsible human, especially in this country.
Andy in Blairsville
October 27th, 2010
2:38 pm
The key point here is nobody owes you a job. Period
If you can’t pass a pee test, find an employer who doesn’t require it.
If you have DUI’s or other convictions, find an employer who doesn’t run background checks.
If your credit sucks, find an employer who doesn’t run a credit check.
Life really is full of choices.
Not to mention your previous choices in life can effect your future employment.
gary
October 27th, 2010
2:46 pm
Once again people are upset about rewarded for good behavior. I am sorry you defaulted on a credit card or did not pay back your student loans on time. Life has consequences, get used to it.
Frank
October 27th, 2010
2:46 pm
Hey Andy,
You are right why can’t a company hire illegal immigrants if they feel they are a way better bargain then an American. You can pay a so much less which will make the product of companies so much more competitive plus they are willing to work harder for it! That is the same reason they say Americans are too needy, health insurance, minimum wage, etc. Hey its my company, its my right.
Darcel Patterson
October 27th, 2010
2:55 pm
Good afternoon, I’m glad this discussion is taking place. Those who are using credit reports to disqualify individuals from receiving a position they are more than qualified for are wrong. I agree with all of the above that that is an invasion of people’s privacy and can reflect a skewed picture of what is happening in someone’s life.
I do hope the laws change and one thing I have learned is when we’re completing applications for jobs DO NOT GIVE POTENTIAL EMPLOYERS your ss#. That way, they cannot go into any credit reporting website and pull up our individual information without our permission. Can this become a law so the practice can stop once and for all????? IF you add the credit report with receiving negative remarks or possible elimination from consideration because of unemployment for over 1.5 years, that is going to eliminate some of the most talented people in our country who are unemployed right now…people with degrees, excellent training, a wealth of experience, etc.
mike
October 27th, 2010
2:58 pm
Credibility is credibility, regardless if it’s personal or financial. I would want a credible person working for me.
Real Deal
October 27th, 2010
3:00 pm
“If your credit sucks, find an employer who doesn’t run a credit check.’
Like Governor of Georgia?
Andy in Blairsville
October 27th, 2010
3:00 pm
Hey Frank – Hiring illegals is illegal, so no a company shouldn’t do it. Period
However, pee tests, background checks and credit checks are legal.
What’s your next question?
Andy in Blairsville
October 27th, 2010
3:03 pm
All that employer has to do is google your name and bankruptcies pop up. It wouldn’t surprise me if foreclosures do too since they are listed in the county paper.
Dave
October 27th, 2010
3:19 pm
How can an employer judge a person on credit report? I have seen error’s on my own report and sent an great deal of time to get them corrected. But what would had happen during this time I was seeking employment? The credit agencies do not keep perfect records so how do employers get away with this?
Remember the Federal Polygraph Act? Before that time anyone could buy a polygraph instrument and go into business. Millions of workers lost jobs because polygraph results are inconclusive and not even used in our courts as to lay quilt.
rivercard
October 27th, 2010
3:23 pm
“credit checks are legal.
What’s your next question?”
The question is should they be? Many protections/rights enjoyed by workers today come from activities that were once legal/permitted.
Can you provide any data to demonstrate the correlation between the subjective interpretation of a credit report and job performance? I would guess that is just the you “feel”.
rivercard
October 27th, 2010
3:28 pm
Dave,
You are 100% correct and thanks for bringing up the polygraph voodoo.
In addition to errors on credit reports , do companies even have any parameters for how they interpret these reports?
Andy in Blairsville
October 27th, 2010
3:38 pm
Credit checks for pre-employment are legal.
Whether an employer chooses not to offer you employment based on a bad credit is up to said employer. Once again it’s his discretion and it’s its within the law. For all you know the employer decided to overlook your bad credit but chose to offer the job his friend, a better qualified candidate or that hot 23yo piece of tail that just walked into his office with a resume.
The potential employer isn’t required to tell you squat.
Violinist
October 27th, 2010
3:38 pm
This practice is widespead and has been for years. Funny how it takes a crappy economy and high employment for people to realize who their own worst enemy is … look in the mirror! I am tired of all the whining and excuses – so are lots of other hard working Americans!
JOANN
October 27th, 2010
3:38 pm
To Margret Grey:
wtf does Obama have to do with this blog? What about Good ole GWB?
Jack
October 27th, 2010
3:41 pm
When the AJC moved from Downtown to Dunwoody, most employees had to reapply for their jobs. Guess what? AJC used Credt Reports to deny some long term employees jobs.
SayWhat
October 27th, 2010
3:42 pm
Big Brother is watching…and prying…and judging…and, well you get it.
Apex
October 27th, 2010
3:50 pm
Expect for life to get tougher on everyone that has ruined their credit and blamed it on the economy and unemployment. It high time everyone realized personal responsibility matters and will be rewarded. It is sad to see the socialist attitudes that exist in light of the Historical event that will take place next Tuesday.
American Girl
October 27th, 2010
3:50 pm
What if people are sick with a terminal illness that has cost them their job? What if a child has been sick? Everyone know medical cost are through the roof. They shouldn’t be penalized when looking for a job.
rivercard
October 27th, 2010
4:03 pm
Statistics would indicate that the majority of the “do like me” , “personal responsibilty” , blah, blah posters on here would be in the same boat as many that have lost jobs, had medical issues etc.. in short time should they same happen to them. I guess their anonymous sanctimony makes them feel better about themselves, but they aren’t really fooling anyone.
Are there irresponsible people? Of course. Always have been ,always will be. You would have to suffer from cranial rectal inversion to think that the things happening to people in this economy are all due to their inabilty to be responsible.
Steve Gia
October 27th, 2010
4:05 pm
We can Help Individuals getting back to Credit Health.
As seen On NBC/Fox News
http://youtube.com/getcredithealthy1
Andy in Blairsville
October 27th, 2010
4:05 pm
“What if people are sick with a terminal illness that has cost them their job?”
If it’s terminal, you probably don’t need another job.
George Bailey
October 27th, 2010
4:09 pm
I feel need to clarify this for those of you that think your FICOscore is a determining factor. The report that is generated on your credit history is merely a detailed report of your CREDIT ACTIVITY. It’s not the same report you get from Equifax. The report that is reviewd by HR shows all accounts that have been opened or closed under your name and social. It shows all debt for a certain time period, but no “score”. Also, I have posted this earlier, THERE IS NO NEGATIVE PERCEPTION IN REGARD TO MEDICAL BILLS. Please stop using the “medical bills” as a reason as to why your credit history is under par. It’s not the illess, operation, medial emergancies, etc… that worry the employers. It’s the collection notice from your previous landlord and the 2 auto re-posessions along with the multiple CC accounts that have been closed by the cc company for non-payment that is costing you the job.
What if ...
October 27th, 2010
4:10 pm
I paid my debts like I agreed to?
I kept medical insurance coverage on my healthy family?
I saved for years instead of spending my money on intangibles and luxuries?
The rewards for being personally responsible outweigh all the “what ifs” you can make up.
Cry me a river
October 27th, 2010
4:12 pm
rivercard
Really?
October 27th, 2010
4:17 pm
The fact of the matter is that people with bad credit are not all irresponsible and people with good credit are not all responsible. The concept of credit is bogus anyway. In order to establish aand maintain good credit you have to borrow money and pay it back in a timely fashion even though you may not necessarily need to borrow the money in the first place. That’s how it works! I would say that if you had no credit at all then that means that you are responsible enough to have saved and paid in cash for whatever you need. That seem to reflect more on a persons character than credit. I think we all are warped by the whole concept.
tom
October 27th, 2010
4:21 pm
Fed Govt and State need to pass laws against this practice.
Cry me a river
October 27th, 2010
4:22 pm
You people can whine and argue till your poor little fingers can blog no more! Facts are that things won’t change becuase the financially irresponsible aren’t happy about it. That’s not the way things happen and it won’t change. So blah, blah, blah and hate the good people of this country all you want. You still look pathetic and things won’t change.
rivercard
October 27th, 2010
4:23 pm
Cry me a river
Thanks for the brilliant response. You have added so much to the conversation.
rivercard
October 27th, 2010
4:26 pm
@George Bailey
I disagree with you about the validity of using these reports in the hiring process, but thanks for clarifying the credit score issue and what is on these employer reports.
Cry me a river
October 27th, 2010
4:26 pm
Statistics would indicate that the majority of the “do like me”, “personal responsibilty”, posters on here would never be in the same boat as many that have lost jobs, had medical issues etc.. in short time should they same happen to them. I guess the anonymous whiners sanctimony makes them feel better about themselves, but they aren’t really fooling anyone – deadbeats are deadbeats
Are there responsible people? Billions. Always have been always will be! You would have to suffer from cranial rectal inversion to believe that the things happening to people in this economy are not due to their inabilty to be responsible.
George Bailey
October 27th, 2010
4:30 pm
No problem Rivercard. And for the record, I’m not advocating the Credit Report as the hiring tool, merely explaining how the data is interpreted by the employers.
rivercard
October 27th, 2010
4:34 pm
@George Baily
As you seem to have some familiarity with this- Do the employers have some type of parameters/formula they use or it more subjective?
Andrew
October 27th, 2010
4:37 pm
It’s simple: Being in overwhelming debt makes the candidate a risk for theft or espionage. Say you had $200,000 debt that you could not make a single payment on. Someone comes up to you and offers you $200,000 if they you will give them an internal document. This is why credit checks are an important part of the background check.
Bootney Farnsworth
October 27th, 2010
4:41 pm
Margaret Gray sounds like an idiot. She should stick to the thread that asks “How bad do you miss George Bush and how are you coping with his absence ??” During this time of recession, with people losing jobs, home forclosures, etc., who has great credit anyway ?? If you do, good for you. All the privacy issues aside, This is the absolute worst time for an employer to require good credit ! We’ll see how well the search for employees goes…..
Netbanker
October 27th, 2010
4:47 pm
Use of a credit check can be applicable in certain cases, but even so bad credit should only be a reason to ask questions rather than screen out an application. For example, would you want a financial planner or credit counseler who has bad credit? Now if the reason they did was due to an illness or job loss that resulted in poor credit for a short period then the credit report alone won’t provide that detail. In the world of banking poor credit is generally enough to disqualify a candidate and that has been the case for 20+ years.
Really?
October 27th, 2010
4:50 pm
@ Andrew-If you are a person that has access to internal documents that someone is willing to pay $200k for then you would probably not be in debt for $200k. It’s probably a well paying job. Maybe in the military but most of the kids that join don’t have credit in the first place.
George Bailey
October 27th, 2010
4:51 pm
Rivercard, company policy varies, but the general rule of thumb is 5 years of history. If the candidate has a large number of medical bills, those are not counted against them. If the candidate has been unemployed for 6 months to a year, but had no outstanding debt or payment issues prior to their job loss, then they are still looked at favorably. The “Red Flags” are the delinquent payments on the revolving accounts such as CC as well as delinquent payments on auto loans or store cards. Really big indicators seem to be collection notices from utility companies or former landlords that originated before the job loss. simply put: We understand that you had some rough times due to losing your job. However, the concern is why weren’t you meeting your financial obligations while you were gainfully employed? If someone is living beynd their means, that is a concern for the employer as it can be interpreted that this candidate has poor judgment, bad decision making ability, or worse, that this candidate isn’t particularly concerned about honoring their commitments. Any of the above would be a basis for not hiring.
Really?
October 27th, 2010
4:57 pm
@Bootney Farnsworth-I think that you are right on with your point. I don’t think we have quit seen this type of economic environment before in the credit age. Credit checking right now is like asking a homeless person for a dollar. What’s the point?
Andrew
October 27th, 2010
5:03 pm
@Really
You cannot keep “Top Secret” clearance and carry alot of debt. That’s been the way that works for decades. In fact, you cannot even get “secret” clearence with alot of debt. It doesn’t matter if you pay on time or not.
BTW, how much would a company pay so they can get a classified release date? Being the first to market can be the diff between boom or bust for a company. Even the lowest worker on a project is aware of his/her deadline.
Tony
October 27th, 2010
5:12 pm
George Bailey is absolutely correct in his assessment. To expand on it a bit, hiring managers and HR are required to manage risk at all levels. I hire people in a technology sector where employees have access to all sorts of sensitive information, either specifically or in aggregate. Credit scores do not reflect on their ability to do a job, but rather if I should let them into my circle of trust. A long history of unstable credit is not acceptable to my company or the financial institutions we support.
Welcome to the real world. Sucks doesn’t it.
Jake Sneed
October 27th, 2010
5:15 pm
Nathan Deal has Bad Credit…
Nathan Deal has Bad Credit…
Really?
October 27th, 2010
5:17 pm
@Andrew-I got your point initally just think that the example was kinda exaggerated a bit. Having served in the military I know the protocol for clearances. I had a top secret clearance myself. I think that I was misunderstood in my post. I was saying that the military is a place where you can make pennies for a salary but have access to valuable documents. Not that you can have large amounts of debts. Reread.
Keeping it REAL
October 27th, 2010
5:20 pm
Maybe if Freddy & Fanny had performed credit checks, the real-estate industry would NOT be in the current state it is in… OBummer loving losers that they ARE!!!
Nisha
October 27th, 2010
5:24 pm
I don’t think that a person’s credit should be checked in order to be employed. What kind of sense does that make? What ever happened to just checking a person’s background history. Why does an employer need to know your credit history to do a job? Someone please tell me. There are alot of people out here who work hard everyday, and have gone through things that are no one else’s business such as there credit may be bad because they helped someone and co-signed for someone, or they lost there job and couldn’t make payments on something, you don’t know…… It’s not your business if they can be approved to get something. It makes no sense, and it should be against the law. There are alot of good hard working people in this world who can do the job just as good as the next person who has “good credit”.
MortgagesvsBanks
October 27th, 2010
5:25 pm
From the article: “To my knowledge there isn’t any research out there that makes the critical link between what shows up on a credit report and information that gets to whether someone will be able to perform the job,” Crawford said.
From BudFor that reason, SunTrust mortgage company does not conduct credit background checks, spokesman Hugh Suhr said. “We researched the issue a number of years ago and did not find sufficient data to support a correlation between a score and job performance and risk,” Suhr said.
What Suhr isn’t telling you is that the mortgage brokers that they do business with OUTSIDE of Suntrust give the company way to much money to care about “credit”….that response ONLY relates to the MORTGAGE DIVISION and not Suntrust Bank….if they cared about “credit” in the mortgage side..they wouldn’t have any outside brokers bringing them in business…WOW..isn’t that how we go into this trouble in the first place!
Leslie
October 27th, 2010
5:28 pm
As a purchasing agent or a buyer, you are authorized to spend money on the Company’s behalf. If you are financially compromised you might be more tempted to take a kick back to steer your Company’s monies to a “generous” vendor. Besides, if you can manage your own finances wisely you are more likely to make wise decisions on your Company’s behalf. I say check away!
Lazy Beach Bum
October 27th, 2010
5:35 pm
I am j lazy…..drink my beer…hang out at the beach….my credit is in 790’s -810 … range been working the same job for 26 years. Got just under 8 years on my condo…..my life is grand. I love it!!!!