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Employers : Do you run Credit Checks / Background Checks


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Old 16th December 2009, 12:46 AM   #46
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A lot of companies do run credit checks - but you will know about it when they do because you have to sign a release agreeing to give them authorization to do it. I personally think that unless a person is applying for a job where this information is relevant, this is just another way for our privacy to be invaded. Yes, you must give permission but if you don't, you might as well not even bother to apply. So, as far as I'm concerned, it's an invasion of privacy.

The company I work for runs credit checks and I told the COO once that I thought this practice was invasive and unnecessary. I wanted to hire someone who had bad credit, and the COO told me that he wasn't necessarily weeding out people who had bad credit, but those who consistently had bad credit or other things that stood out. That made me feel a little better but I still object to this practice. It's almost impossible for the average Joe to stand up for himself on this issue.
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Old 16th December 2009, 5:13 AM   #47
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Originally Posted by Lauriebell82 View Post
I agree. I don't know how running a credit check would really matter. Actually I would think being hired would HELP someone's credit score, as it would give them an income to pay their bills!

I actually didn't even know companies did that. I don't know how it is relevant...
Credit checks cost like $29 bucks so I have a hard time believing everyone doesn't run them.
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Old 16th December 2009, 2:07 PM   #48
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If a person has had a recent bankruptcy and can't handle their own finance then why on earth would a company put them in hands reach of being in charge of theirs ?
I've hired people and our company policy was to run a credit check. I honestly think it's a hit-or-miss proposition for the reasons I mentioned earlier. Someone can consistently pay utility bills late, even to the point of having their phone shut off. Yet in most states, because of fair credit reporting regulations, it won't get reported to a credit bureau unless they send it to collections after 60 days. By contrast, if someone happens to slip up and miss a single payment of student loans or a credit card, that one payment shows up on a credit report and lowers their FICO score. Credit scores don't affect me one way or the other because they're not considered essential to background screening in my field, but I'm just pointing out that credit scores have holes. I won't say that they don't have *any* validity, but I don't think they're nearly as valid as people think they are. I think that, most of the time, they're conducted to give hiring managers/owners peace of mind, so they can tell themselves (and others) that they ran a thorough background check in case the new hire turns out to be a bust.

I would probably run a credit check as part of a background screening process, but it wouldn't be the end all/be all. As carhill said, I would want an explanation. But someone could have bankruptcy because their spouse got sick or some other reason that would not necessarily be anything other than bad luck. The one thing that would concern me if I were hiring someone with bad luck, though, is the one thing that happened to you, which really doesn't have as much to do with responsibility as it does someone's character under dire circumstances. If someone's having financial trouble, I think there is probably a higher possibility that they might feel tempted to take from the till. So if a credit check revealed personal circumstances were tough, I would want to have more evidence that this person was of solid character. I would want highly reliable references -- better yet, people I know -- to vouch for this person. I suspect this is where people with bad credit get tripped up in the hiring process. They apply to work for a big company, with a big HR department, and both sides (applicant and HR department) are dealing with people they don't know. Working with people you don't know is risky, so when the red flag of bad credit pops up, it just serves as a warning. Perhaps if they knew each other, things would be different.
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Old 16th December 2009, 2:30 PM   #49
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I just wanted to add that people who, superficially, showed questionable credit, once interviewed and their explanations corroborated, generally received the financing they sought, or we offered an alternative collateralization which met our underwriting standards. I imagine it's the same in the workplace, wrt employment contractual issues, with the difference being credit scoring is just one piece of the background pie for an employee.

For me, the bottom line is people are more than a credit score or background check; those tools are useful ways of getting to know someone you are betting your company's, shareholder's or personal money on. Information is a good thing, but it's not everything
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Old 16th December 2009, 2:33 PM   #50
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Credit checks cost like $29 bucks so I have a hard time believing everyone doesn't run them.
Yeah but it's still extra money and time they have to do those things. Not eveyone runs them, I know companies who don't.

But yeah, I agree that companies are beginning to do them more and more.

Oh plus, with the number of applicants that are applying these days that money will add up if they start doing tons and tons of credit checks.
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Old 16th December 2009, 2:36 PM   #51
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Originally Posted by Lauriebell82 View Post
Yeah but it's still extra money and time they have to do those things.
LB, you're fooling yourself if you think your potential employers won't spend $29 in an effort to make sure their counselors - people entrusted with delicate, fragile people to counsel/treat - are who they claim they are, have the background they claim, etc.

Let's put it this way... I don't know of any employers that DON'T run a credit check, if only to verify the things mentioned before.
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Old 16th December 2009, 2:39 PM   #52
 
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Originally Posted by Lauriebell82 View Post
Yeah but it's still extra money and time they have to do those things. Not eveyone runs them, I know companies who don't.

But yeah, I agree that companies are beginning to do them more and more.

Oh plus, with the number of applicants that are applying these days that money will add up if they start doing tons and tons of credit checks.
Spending $29 for each candidate is better than spending money on defending lawsuits or negative publicity. Even if they have to spend $290 on 10 candidates it is still cheaper than 1 billable hour.
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Old 16th December 2009, 2:42 PM   #53
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Spending $29 for each candidate is better than spending money on defending lawsuits or negative publicity. Even if they have to spend $290 on 10 candidates it is still cheaper than 1 billable hour.
Ding ding ding! A credit check provides everything that a criminal background check does, and then some, and it's cheaper. There's no reason NOT to do one, particularly when the profession is a sensitive one.
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Old 16th December 2009, 2:43 PM   #54
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LB, you're fooling yourself if you think your potential employers won't spend $29 in an effort to make sure their counselors - people entrusted with delicate, fragile people to counsel/treat - are who they claim they are, have the background they claim, etc.

Let's put it this way... I don't know of any employers that DON'T run a credit check, if only to verify the things mentioned before.
I'm just saying that my old companies have not run credit checks but HAVE run criminal, FBI fingerprints, child abuse. That's what they really want to know.

But I think you missed the part where I said that I know of places who DO.

Last edited by LoveShack.org Moderator; 16th December 2009 at 7:57 PM..
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Old 16th December 2009, 2:46 PM   #55
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I'm just saying that my old companies have not run credit checks but HAVE run criminal, FBI fingerprints, child abuse. That's what they really want to know.
Well, I bet you good money that they did. Do you have copies of your applications where you signed giving them permission to investigate what you put on your application, including, but not limited to, the other investigations you mentioned? Most standard applications do give permission to conduct credit checks.

In any event, I think you just need to be a little wiser in the way prospective employers coduct themselves, that's all. It will do you a world of good.
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Old 16th December 2009, 2:57 PM   #56
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It doesn't hurt to pull your own report (from the separate vendors) and have that information yourself. It won't be as detailed as a lender report (don't know what employers get) but still will cover any potential sensitive areas and give ample opportunity for correction and/or explanation. Make information work for you
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Old 16th December 2009, 2:57 PM   #57
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Well, I bet you good money that they did. Do you have copies of your applications where you signed giving them permission to investigate what you put on your application, including, but not limited to, the other investigations you mentioned? Most standard applications do give permission to conduct credit checks.

In any event, I think you just need to be a little wiser in the way prospective employers coduct themselves, that's all. It will do you a world of good.
Most agencies require you to obtain/pay for your own clearances. I looked online and it just said "do you give us permission to contact past employers and background checks to assess your moral character, ect. It didn't say anything about a credit check but it MAY be possible that they would run one as I said.

Basically my point was that I know of some companies who don't (have talked with HR people).

I probably could be a little wiser, that's true. I have gotten fooled pretty good. I have learned though so some good came out of it.
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Old 16th December 2009, 3:04 PM   #58
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I have gotten fooled pretty good.
And I bet I know who's fault you think that is.
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Old 16th December 2009, 5:40 PM   #59
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In California, I know for a fact they do. They do both, complete with fingerprinting.

Employers run credit checks not really for purposes of checking your credit history. Rather, they run a limited employer report (that doesn't show age/birthdate) to look for judgments, convictions/criminal history, and verifying education/experience/employment history. Credit checks are also much less expensive than complete background checks. They get the information they really need (criminal history, verification of information) from the credit report.

If you're denied a job or fired based on information in your credit report, the employer is required to notify you of this.


So you are saying they do the CR more based on finding out if you worked where you said you did....If you are a hidden criminal...ect....Its not really your * score * or pass or fail that matters ?
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Old 16th December 2009, 5:45 PM   #60
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I just wanted to add that people who, superficially, showed questionable credit, once interviewed and their explanations corroborated, generally received the financing they sought, or we offered an alternative collateralization which met our underwriting standards. I imagine it's the same in the workplace, wrt employment contractual issues, with the difference being credit scoring is just one piece of the background pie for an employee.

For me, the bottom line is people are more than a credit score or background check; those tools are useful ways of getting to know someone you are betting your company's, shareholder's or personal money on. Information is a good thing, but it's not everything
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