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Employers : Do you run Credit Checks / Background Checks


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Old 14th December 2009, 10:00 PM   #1
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Lightbulb Employers : Do you run Credit Checks / Background Checks

I was wondering what percentage of employers run Credit Checks ? If so would you hire someone who had a Bankruptcy ?

When the employer runs a Background check , what is he/she checking ?
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Old 14th December 2009, 10:02 PM   #2
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My company does not. However, we check references diligently. There is NO way to get a job at my company without good references.
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Old 14th December 2009, 10:04 PM   #3
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My company does not. However, we check references diligently. There is NO way to get a job at my company without good references.
Do you mean personal references like friends or people who have known you or do you mean Employer references ?
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Old 14th December 2009, 10:07 PM   #4
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Last year, I spoke to a woman who had spent 20+ years as a corporate recruiter. She said the practice of employers routinely running credit checks on potential employees has been a disaster for millions of job seekers. Now, there are some jobs where a person's credit rating is important for a potential employer to know. But there are many more where it is pretty much irrelevant. However, employers check anyway, and weed people with poor credit. She said it was one of the biggest obstacles that keeps otherwise qualified people from getting hired.
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Old 14th December 2009, 10:10 PM   #5
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I don't know more than a few company owners personally, meaning owners with 50 or more employees who have HR people, but my understanding is, in our industry anyway, DMV/credit/drug/background checks are standard, since the employees drive company equipment and operate and/or operate dangerous machinery. I do standard background and credit checks on all tenants who apply for rental property.

What we look for is a pattern of behavior, either responsible or irresponsible or in between. A tenant who doesn't pay on time, blows up their security deposit and has past dues and collections doesn't make the grade with me. I'm not privy to the exact parameters of my business colleagues, understandably, but assume they work within the letter of the labor law to hire the most appropriate employees for their company philosophy.

Would a bankruptcy automatically be a fail? For me, no. It would require explanation supported by verifiable facts. I used to work on loan committee at my credit union and have heard all the stories and seen thousands of credit reports. BK knows no socio-economic boundaries so no one is exempt from scrutiny.

Hopefully you'll get opinion from large business since there are a lot of LS'ers who work for or run large corporations. I'm just a little guy.
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Old 14th December 2009, 10:12 PM   #6
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Originally Posted by ADF View Post
Last year, I spoke to a woman who had spent 20+ years as a corporate recruiter. She said the practice of employers routinely running credit checks on potential employees has been a disaster for millions of job seekers. Now, there are some jobs where a person's credit rating is important for a potential employer to know. But there are many more where it is pretty much irrelevant. However, employers check anyway, and weed people with poor credit. She said it was one of the biggest obstacles that keeps otherwise qualified people from getting hired.
I would say so considering millions are underwater on their over inflated mortgages , millions ( like over 5 million ) have lost their jobs and fall behind on bills and thats compounded by more job losses and more houses going into foreclosure...

Pretty rotten time to base everyone on their credit right now..
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Old 14th December 2009, 10:13 PM   #7
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I'm horrified that a company would run a credit check on an employer!
I've never heard of it. A criminal check for sure- but a credit check??? What is the reasoning behind that? Credit seems very, very personal.

When I lost my business, I fell behind on my bills and car lease - they wouldn't know anything about my business and the bankruptcy because it was incorporated- but a credit check would show I was negligent with my utilities and car and visa for 6 months while I struggled.

A credit check doesn't put anything in context for an employer. I don't see what business they would have checking such a thing. It doesn't even seem legal to check!

I don't know- I'm in Canada, but I've never heard of a credit check. Criminal offense makes a lot of sense- not the credit.
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Old 14th December 2009, 10:17 PM   #8
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Originally Posted by carhill View Post
I don't know more than a few company owners personally, meaning owners with 50 or more employees who have HR people, but my understanding is, in our industry anyway, DMV/credit/drug/background checks are standard, since the employees drive company equipment and operate and/or operate dangerous machinery. I do standard background and credit checks on all tenants who apply for rental property.

What we look for is a pattern of behavior, either responsible or irresponsible or in between. A tenant who doesn't pay on time, blows up their security deposit and has past dues and collections doesn't make the grade with me. I'm not privy to the exact parameters of my business colleagues, understandably, but assume they work within the letter of the labor law to hire the most appropriate employees for their company philosophy.

Would a bankruptcy automatically be a fail? For me, no. It would require explanation supported by verifiable facts. I used to work on loan committee at my credit union and have heard all the stories and seen thousands of credit reports. BK knows no socio-economic boundaries so no one is exempt from scrutiny.

Hopefully you'll get opinion from large business since there are a lot of LS'ers who work for or run large corporations. I'm just a little guy.
Hi BIG guy Hey do you take into account someone with stellar credit for 25 years who fell into unfortunate losses due to the economy , a lay off , the mortgage crisis...and the walls came tumbling down eventually ...

Alot of ppl used to judge and stigmatize BK but with so many companies and personal BKS due to our current economic situation, I would hope each employer would look into it individually than to look at a credit score likely very low after all that...
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Old 14th December 2009, 10:20 PM   #9
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Businesses are facing lean times too, and they need employees who are focused on making the company money to preserve their jobs. IME, employees who are distracted by personal stuff, for example like myself with a divorce and my mother's care, make for generally mediocre to poor productivity. Add in financial stress and the employee can become totally distracted, or, worse, steal from the company. My philosophy would be to cherry pick the absolute best of the available labor, balancing employee personal and financial health with their skillset and prior dedication to their profession. Even that, right now, is a risk, but the upside is a company can bring some great talent on-board from other less well managed businesses by stealing their best people. Dog eat dog. I've been eaten plenty
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Old 14th December 2009, 10:24 PM   #10
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Hey do you take into account someone with stellar credit for 25 years who fell into unfortunate losses due to the economy , a lay off , the mortgage crisis...and the walls came tumbling down eventually ...
Me, personally, if I was reviewing the loan and/or tenant? Sure, I take everything into account. I'm human too. Times are tough, business is down and I'm going through a divorce. Life is imperfect and I empathize. My empathy has limits

When I worked loan committee, I would call in a borrower with such issues and we'd talk face to face. I'd ask some hard questions. My dad was a CPA and he taught this country boy a lot about finance. He was always tough but fair and that's how I've always been. I expect the best out of people because most people are decent and hard-working. It's ferreting out the deadbeats that's the hard part....
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Old 14th December 2009, 10:25 PM   #11
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Quote:
Originally Posted by D-Lish View Post
I'm horrified that a company would run a credit check on an employer!
I've never heard of it. A criminal check for sure- but a credit check??? What is the reasoning behind that? Credit seems very, very personal.

When I lost my business, I fell behind on my bills and car lease - they wouldn't know anything about my business and the bankruptcy because it was incorporated- but a credit check would show I was negligent with my utilities and car and visa for 6 months while I struggled.

A credit check doesn't put anything in context for an employer. I don't see what business they would have checking such a thing. It doesn't even seem legal to check!

I don't know- I'm in Canada, but I've never heard of a credit check. Criminal offense makes a lot of sense- not the credit.
I agree with you.
I can also see if you were a Predator or a Criminal how they would feel at risk...
But so many have suffered lately ( and many more will in the future until our economy levels out near 2011 they predict ) I don't think its fair right now to judge credit...
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Old 14th December 2009, 10:28 PM   #12
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Originally Posted by carhill View Post
Businesses are facing lean times too, and they need employees who are focused on making the company money to preserve their jobs. IME, employees who are distracted by personal stuff, for example like myself with a divorce and my mother's care, make for generally mediocre to poor productivity. Add in financial stress and the employee can become totally distracted, or, worse, steal from the company. My philosophy would be to cherry pick the absolute best of the available labor, balancing employee personal and financial health with their skillset and prior dedication to their profession. Even that, right now, is a risk, but the upside is a company can bring some great talent on-board from other less well managed businesses by stealing their best people. Dog eat dog. I've been eaten plenty
Awhhh give yourself some lienancy...! We are all human., we all suffer losses , there is no employer that can guarantee even their own family members won't suffer tragedy...

I just think it should be a case by case basis...
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Old 14th December 2009, 10:28 PM   #13
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Do you mean personal references like friends or people who have known you or do you mean Employer references ?
Employer, I don't give a cap about about a reference that's your friend
We require positive feedback from a minimum of two references, unless the person has been with the same company for 5+ years. The qualification for high up executives is of course more strict, I'm only talking about the entry level to middle management positions I deal with.

It's rare, but exceptions can be made for new college grads.
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Old 14th December 2009, 10:30 PM   #14
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Originally Posted by carhill View Post
Me, personally, if I was reviewing the loan and/or tenant? Sure, I take everything into account. I'm human too. Times are tough, business is down and I'm going through a divorce. Life is imperfect and I empathize. My empathy has limits

When I worked loan committee, I would call in a borrower with such issues and we'd talk face to face. I'd ask some hard questions. My dad was a CPA and he taught this country boy a lot about finance. He was always tough but fair and that's how I've always been. I expect the best out of people because most people are decent and hard-working. It's ferreting out the deadbeats that's the hard part....
Now a Loan is a different matter...It will take years likely before a bank would give a BK a loan. With Rentals I would hope they would also sit you down and talk about what happened. Otherwise there will be a lot of vacant apartments and homes if everyone judges credit with a blind eye....
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Old 14th December 2009, 10:30 PM   #15
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Most social service agencies do not run credit checks or even pay for background checks because those require money and small agencies just don't have those kinds of resources.

It might be quite possible that other businesses might, however I don't even know how that would be relevant to their ability as an employee. With the economy as it is and the lay off rate, I'm sure quite a few people have had their credit score tank due to loss of money/resources. The only thing I could think of was if they were in a position where they delt with actual money for the company (risk of stealing). Other than that though, I dont see the point.
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