Why run creid checks on potential employees?

[mom-from-missouri]

Why is it that when you apply for a job now, the applications state they run credit checks??? (I even had this done while applying for a volunteer position that in no way would involved handling money.)

A girl at church was rejected for a job due to her low credit score. Even when she explained her husband was not working due to illness and she was working to pay the bills. They sent her a letter stating someone else had been hired and cited the reason as being her credit score. (I saw the letter myself)

[simple987]

I have wondered that too, and I was once told that its a reflection of your character, and also the risk that you may steal money from the company.

[Daylily]

At my job, I have access to seeing the social security numbers of all of our clients. Nearly everyone around me has this same access. I'm an honest person and would never do anything with this info. The company does require credit checks and criminal checks. I think it is a good idea.

[Superhuge]

I don't agree with the policy.

I had a rough time with paying for college, and I'm still working to repair the damage. I lucked out in getting a job that didn't run a credit check (with full access to P&L and employee data)!

I would be devastated to be punished for the lessons learned during my college years.

[boefixepa]

My aunt did not get a job once for the same reason, bad credit. I can see both the pros and cons of it. I am not against running it, especially if you are dealing with money or sensitive information, but I think you should also be allowed to explain any issues with it. They should consider the whole picture, not just the number. There are MANY reasons people may have poor credit which will not effect their workability at all. Those situations need to be taken into account.

[atomicrc11]

I agree with running credit checks, but the fact is if you know your credit is bad, telling them before they run the check will probably increase your chances of getting the job. It at least shows you are honest and are working to improve your credit score. If you try to explain after, they will assume you were trying to hide it from them.

[sweeps]

Although I benefit from this practice, I disagree with it.

So there is a correlation between credit scores and job performance, or between credit scores and automobile accidents. There may also be a correlation between hair color and job performance, or between number of cavities you've had with number of speeding tickets. At best this stuff is irrelevant, at worst it's discriminatory.

Also I have a problem with the secrecy of credit scoring. No one knows the specific details that go into the calculation of your credit score. Ultimately this means that there are criteria going into your prospective employer's hiring decision that you have no control over.

[DebbieL]

I would strongly disagree with it. Unless I'm applying for a job as a credit counselor, etc., what would that have to do with my competence at an unrelated field? I have never heard of that where I live (I'm Canadian), nor have I ever seen anything like that on an application here. It seems like a violation to me.

PS - I have a high credit score.

[bjl584]

Basically, I am assuming, that a company uses it as a gauge as to someone's personal responsibility, motivation, work ethic, etc. I guess that they figure if you have poor credit or a lot of cc debt, then that would tend to make you an irresponsible person and subject to frequent call offs, insubordination, no shows, theft, etc., etc. The problem with behavioral tests of that nature is that they tend to paint a broad brush and will not seperate the person that truely is irresponsible from the person that has had a string of bad luck or unfortunate circumstances happen to them.

[vsjhoc]

There is another reason why some employers think your credit record is relevant. If you are going to have access to sensitive and valuable information -- whether it is national security stuff or payroll information at your company -- they might not want someone with a lot of debt. Why? Someone who is desperate for money might be more likely to sell that information to a third party. Economic pressures might cause them to cave.

Originally Posted by sweeps

... Also I have a problem with the secrecy of credit scoring. No one knows the specific details that go into the calculation of your credit score. Ultimately this means that there are criteria going into your prospective employer's hiring decision that you have no control over.

There is a lot of detailed, accurate information about FICO credit scoring available at the forums at the myFICO website.

[sweeps]

Originally Posted by vsjhoc

There is a lot of detailed, accurate information about FICO credit scoring available at the forums at the myFICO website.

Actually this and all public info about FICO is vague -- the algorithms are proprietary and closely guarded. All people have to go on is general advice from Fair Isaac, and anecdotal evidence from sites like creditboards and fatwallet.

One other thing I didn't mention... Someone who chooses not to use credit cards may have a low credit score despite being a very responsible person. Conversely someone who recklessly uses credit but lives with his parents to make the payments may have a very good credit score, but may not at all be responsible.

[mom-from-missouri]

Another concern of mine is this: I've heard that having a lot of "hits" on your credit report can lower your score. So, if a person is going job hunting and keeps having their credit score checked, is that going to lower their score??

[LivingAlmostLarge]

Not by a lot, usually all hits within a 2 week period is considered the same. Like mortgage shopping. Anyway though, I think it is relevant for people who work in areas where they might sell information, work with money especially. My friends at the bank say everyone there could steal money or sell info. So I can see a reason why.

[tabbycat31]

When I interviewed, I always asked if they would do a hard or soft inquiry on my credit report, and most wondered what tehy were (well the interviewer).

If there are any blemishes on your credit report (or background check), explain to them. My background check is messed up due to ID theft but I found a great company that looked past that.

[filifefc]

I agree with it to a certain extend. If your credit history is good, it certainly shows something good about you for the most part. If your credit history is bad, however, it doesn't necessarily mean you can't perform well on the job, and it doesn't always means you are irresponsible (even though it's possible)

[cicy33]

I would think that somehow this would be discriminatory and possibly illegal if not now in the future. I have a low credit score, I have no idea what it is but know that I do cuz I made dumb mistakes that I am trying to correct. But that is not a good reason to keep me from working a job. That would be like saying you have had 3 car accidents in the past 5 years. You don't get the job cuz you are careless. Doesn't matter why you had the accidents. That is morally wrong. I will also continue to have a low score because I am done with credit period. I don't want any at all. I have a paid for vehicle and once everything I have is paid off I will only pay cash from now on. So I will really have no opportunity to raise it anyway. I personally think that the credit score is stupid. In my dh's case he has a very common name but no matter how many times we remove stuff it just keeps getting added. They say there is nothing we can do except keep removing it and putting a disclaimer on it. I get tired of dealing with it. At one point he had about 5 different companies with 5 separate accounts for each one on his report! That is not an exaggeration. I even contacted a lawyer and they say the same thing as long as they remove it that is all that is required. So I can definitely see this becoming a legal issue in the future.

[InDebtInDC]

Originally Posted by sweeps

Also I have a problem with the secrecy of credit scoring. No one knows the specific details that go into the calculation of your credit score. Ultimately this means that there are criteria going into your prospective employer's hiring decision that you have no control over.

You nailed it.

[vsjhoc]

Originally Posted by sweeps

Also I have a problem with the secrecy of credit scoring. No one knows the specific details that go into the calculation of your credit score. Ultimately this means that there are criteria going into your prospective employer's hiring decision that you have no control over.

Originally Posted by InDebtInDC

You nailed it.

I have to respectfully disagree here. There is a lot of info freely available to the public. For example, 35% of your score is your payment history. Simply put, have you paid your bills on time? You have some control over that. Although I do agree that you don't necessarily have control over how a prospective employer uses that information.

[sweeps]

Originally Posted by vsjhoc

I have to respectfully disagree here. There is a lot of info freely available to the public. For example, 35% of your score is your payment history. Simply put, have you paid your bills on time? You have some control over that. Although I do agree that you don't necessarily have control over how a prospective employer uses that information.

vsjhoc, let's say a doctor came out with a study that confirmed 35% of your longevity and healthy aging was based on diet. That would be really interesting, but what foods were in that diet? How often do you have to eat those foods? Is it okay to eat "bad" foods occasionally, and how often? Does it matter what time of day you eat those foods? How did exercise play a role?

Similarly, telling me 35% of my score is based on payment history is not very useful.

Other pieces of the FICO pie are more vague, such as optimal number of credit lines, types of credit lines held, and length of credit history on each credit line.

Who is this Fair Isaac Co., and why can they determine which job I am eligible for?

[Like2Plan]

What about the person who doesn't have a credit card, has a huge savings account, has paid off their mortgage in full, and saves up and pays cash for any purchases--what kind of credit score would that person have?