Jump to content

Employers : Do you run Credit Checks / Background Checks


Recommended Posts

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 ?

Link to post
Share on other sites

My company does not. However, we check references diligently. There is NO way to get a job at my company without good references.

Link to post
Share on other sites
  • Author
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 ?

Link to post
Share on other sites

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.

Link to post
Share on other sites

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.

Link to post
Share on other sites
  • Author
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..

Link to post
Share on other sites

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.

Link to post
Share on other sites
  • Author
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...

Link to post
Share on other sites

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 :)

Link to post
Share on other sites
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....

Link to post
Share on other sites
  • Author
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...

Link to post
Share on other sites
  • Author
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...

Link to post
Share on other sites
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 :laugh:

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.

Link to post
Share on other sites
  • Author
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....

Link to post
Share on other sites

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.

Link to post
Share on other sites
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...

 

Well- it's a scary thought. I wouldn't have been hired if my current employer checked my credit score! It seems far too intrusive.

Link to post
Share on other sites
melodymatters

In the US, many companies do CRIMINAL background checks, but they are usually looking for recent or relative offenses : Someone who enters homes or manages money, can't have theft charges, somone who works with fragile populations can't have abuse charges etc.

 

Credit checks HAVE seemed to become less frequent, as the economy slides into the toilet. I had a near 800 credit score for most of my life, Ilness, death and foreclosure on a rental property have tanked THAT.

 

I know when I managed properties, if somone had great credit for 10-20 yrs and then it went into the red and they had an explanation, I would overlook it as everyone hits tough times as mary said !

 

Spinning off another thread about employers finding out you kept a short term job off your resume ? Nah, Unless you are applying to the FBI, CIA etc, if you are willing to "eat" the gap, they are not going to do DEEP background checks.

Link to post
Share on other sites
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 ?

 

Don't know about the first question.

 

It's illegal (in the U.S.) to not hire someone just because they declared bankruptcy.

 

Depends on the scope of the background check (which often depends on the company, type of work, if security clearance is required, if the potential new hire works directly with money, etc.); there are different levels.

 

The very basic level is: identification verification, credit check, criminal history check. The weight of a credit check depends on several factors, such as if the new hire will be working directly with money, or would be in a position to be bribed.

 

Some other things that could be checked are education verification, employment verification, character....

 

Depends on a lot of factors. Most people (IME) are interested in education, criminal, credit, employment...

Link to post
Share on other sites
  • Author
In the US, many companies do CRIMINAL background checks, but they are usually looking for recent or relative offenses : Someone who enters homes or manages money, can't have theft charges, somone who works with fragile populations can't have abuse charges etc.

 

Credit checks HAVE seemed to become less frequent, as the economy slides into the toilet. I had a near 800 credit score for most of my life, Ilness, death and foreclosure on a rental property have tanked THAT.

 

I know when I managed properties, if somone had great credit for 10-20 yrs and then it went into the red and they had an explanation, I would overlook it as everyone hits tough times as mary said !

 

Spinning off another thread about employers finding out you kept a short term job off your resume ? Nah, Unless you are applying to the FBI, CIA etc, if you are willing to "eat" the gap, they are not going to do DEEP background checks.

 

Hey Melody. Glad you are doing better and thank you for the nice response. This is a little off the subject but how is the job market in Florida doing ?

 

Carry on...hehe...

Link to post
Share on other sites
  • Author
Don't know about the first question.

 

It's illegal (in the U.S.) to not hire someone just because they declared bankruptcy.

 

Depends on the scope of the background check (which often depends on the company, type of work, if security clearance is required, if the potential new hire works directly with money, etc.); there are different levels.

 

The very basic level is: identification verification, credit check, criminal history check. The weight of a credit check depends on several factors, such as if the new hire will be working directly with money, or would be in a position to be bribed.

 

Some other things that could be checked are education verification, employment verification, character....

 

Depends on a lot of factors. Most people (IME) are interested in education, criminal, credit, employment...

 

WOW thank you for a great response. I totally get all the reasons you have stated above for each situation...

 

The one for character check : You mean like your Myspace account , lol...

Link to post
Share on other sites

Again, depends on the company and the type of job, etc.

 

BUT - companies don't just look at your credit score when they do credit checks. They're looking for patterns of behavior.

 

They take into consideration things like, if you had a job, would that solve the credit issues you're having.

Link to post
Share on other sites
WOW thank you for a great response. I totally get all the reasons you have stated above for each situation...

 

The one for character check : You mean like your Myspace account , lol...

 

Ha, again, depends on the job/company doing the background check.

 

Yes, there's a good possibility that a character check would include looking into your MySpace and Facebook accounts (as well as other online activity). But that also includes interviewing people who know you, and NOT just people you choose to list as a reference, but people like previous landlords, roommates, coworkers, bosses, etc.

Link to post
Share on other sites
melodymatters
Ha, again, depends on the job/company doing the background check.

 

Yes, there's a good possibility that a character check would include looking into your MySpace and Facebook accounts (as well as other online activity). But that also includes interviewing people who know you, and NOT just people you choose to list as a reference, but people like previous landlords, roommates, coworkers, bosses, etc.

 

 

I am curious, can you give me an example of the sort of company that is going to go that deep and spend that much, to track down former landlords, roomates etc ???

Link to post
Share on other sites
  • Author
Ha, again, depends on the job/company doing the background check.

 

Yes, there's a good possibility that a character check would include looking into your MySpace and Facebook accounts (as well as other online activity). But that also includes interviewing people who know you, and NOT just people you choose to list as a reference, but people like previous landlords, roommates, coworkers, bosses, etc.

 

Uh oh ! Just kidding....I have pretty good character.

Link to post
Share on other sites

When I wasn't self-employed, we used to run background checks due to the confidential nature of our business, as well as the amount of money that ran through the firms.

 

Credit checks were never done. The only time it mattered was when the employee became an officer of the company. But the employee had to complete a registration form that went to one of our regulators so prior bankruptcies got flushed out at this point.

Link to post
Share on other sites
×
×
  • Create New...