Employers : Do you run Credit Checks / Background Checks

[Mary3]

I can totally understand if you were handling cash ...

 

Or if you drove for a living and your DMV background were checked...

 

But to pull the CR on everyone that needs a job seems expensive and not always relevant...

[New Again]

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 ???

 

Honestly, the primary entity that is concerned with this is the government. Probably this is so relevant in my mind is because of where I live, where the majority of jobs (at least it seems) requires security clearance.

 

The military, many other government jobs, Lockheed Martin, Booz Allen, Deloitte, any private company that has any kind of government contract....

 

There are other scenarios, but that's what I see the most of.

[Lauriebell82]

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 ???

 

I would guess government jobs may do something to that effect. As for just regular businesses/agencies I would think they would not have money or time to do those types of checks unless it was a very indepth job that they needed to know about your moral character. I think that's rare though..

[New Again]

I can totally understand if you were handling cash ...

 

Or if you drove for a living and your DMV background were checked...

 

But to pull the CR on everyone that needs a job seems expensive and not always relevant...

 

Credit checks are pretty basic, but like I said, no one eliminates you just based on your credit score. They look at a lot of different things, and take a lot of things into consideration.

[jerbear]

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 ?

 

I was on the receiving end. I remember getting poked, prodded, credit checks (I saw their inquiry), drug tested, character check, phone check, random people in my past check, school records check, transcripts (official and unofficial) checks, criminal background check (local and regional)

 

All that just to get a job!

 

I do know those with an bankruptcy may or may not get hired depending on their reasons. If they are young and tried to start a venture only for the venture to go bust, they might get a second chance. If the bankruptcy was due to fiscal indiscretions or living beyond one's means, that is a different story.

[amerikajin]

I think something like 45 percent of employers do some sort of credit check. For some it's just a formality - something they do to make themselves feel better for having screened an employee. Other employers simply will not hire someone without good credit.

 

Personally, I don't think that credit scores mean all that much in terms of the ability of someone to do a job. For one thing, there are limits to what credit scores reveal: they don't reveal the fact that someone can be consistently late paying their utilities bills. They don't even report late credit card payments until after 30 days. Someone could still have bad habits and yet have good credit. On the reverse side, someone could do all of the right things and end up in bankruptcy court because of one stretch of bad luck. I think credit reports are probably no more than 50 - 65 percent valid. Past employers, references, and evaluations on the other hand...that's what would interest me the most.

[hotgurl]

I don't think it is fair to base a job on credit history.

 

My husband has bad bad credit. actually worse than bad credit the has no credit.

 

He hates credit cards never had one, always bought older cars in cash, no student loans. He saved for everything he wanted.

 

so when we went to buy a house he couldn't because he had no credit. even though he had the entire cost of the house in investments.

 

The bank basically forced him to get a credit card so we could get a loan.

 

Acutually I have big issues with how the credit agency make you establish credit. Basically in America you are forced to carry debt to establish any kind of credit.

 

Credit card policies are really deteremental to the consumer.

[carhill]

Personally, I don't think that credit scores mean all that much in terms of the ability of someone to do a job.

 

Having read the commercial lender reports of some of our local judges, I might agree

[Lauriebell82]

I think something like 45 percent of employers do some sort of credit check. For some it's just a formality - something they do to make themselves feel better for having screened an employee. Other employers simply will not hire someone without good credit.

 

Personally, I don't think that credit scores mean all that much in terms of the ability of someone to do a job. For one thing, there are limits to what credit scores reveal: they don't reveal the fact that someone can be consistently late paying their utilities bills. They don't even report late credit card payments until after 30 days. Someone could still have bad habits and yet have good credit. On the reverse side, someone could do all of the right things and end up in bankruptcy court because of one stretch of bad luck. I think credit reports are probably no more than 50 - 65 percent valid. Past employers, references, and evaluations on the other hand...that's what would interest me the most.

 

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...

[Mary3]

I was on the receiving end. I remember getting poked, prodded, credit checks (I saw their inquiry), drug tested, character check, phone check, random people in my past check, school records check, transcripts (official and unofficial) checks, criminal background check (local and regional)

All that just to get a job!

 

I do know those with an bankruptcy may or may not get hired depending on their reasons. If they are young and tried to start a venture only for the venture to go bust, they might get a second chance. If the bankruptcy was due to fiscal indiscretions or living beyond one's means, that is a different story.

 

Gosh ! May I ask what kind of JOB this was : Secretary of the Treasury ?

[jerbear]

Gosh ! May I ask what kind of JOB this was : Secretary of the Treasury ?

 

If I tell you then, I'll have to have my way with you then kill you.

[Art_Critic]

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...

 

We have done it.. it is relevant in our company depending on the job.

 

Accounts receivable handles checks and credit card transactions as well as cash for petty cash and other purchasing accounts.

 

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 ?

 

We fired a book keeper accounting manager a few years ago for stealing the cash money in the coke machine and petty cash as well as purchasing items at Sams for her home.

She was having a fairly hard time at home with money.. her husband had lost her job.

We could no longer trust her to handle our money and checks..

 

the list goes on...

 

this is why we do credit record checks on some personnel and we do background checks on all new hires..

We also have them take extensive personality profiles so we know what we are getting..

 

for the record.. all my employees are long term today.. more than 15 years of service and many over 20 years and a few over 30 years here...

[Mary3]

If I tell you then, I'll have to have my way with you then kill you.

 

OKay if you promise to have your way with me first and then kill me

[Mary3]

[quote name='amerikajin' post='2446043'][b]I think something like 45 percent of employers do some sort of credit check. For some it's just a formality - something they do to make themselves feel better for having screened an employee. Other employers simply will not hire someone without good credit[/b]. 

Personally, I don't think that credit scores mean all that much in terms of the ability of someone to do a job. For one thing, there are limits to what credit scores reveal: they don't reveal the fact that someone can be consistently late paying their utilities bills. They don't even report late credit card payments until after 30 days. Someone could still have bad habits and yet have good credit. On the reverse side, someone could do all of the right things and end up in bankruptcy court because of one stretch of bad luck. I think credit reports are probably no more than 50 - 65 percent valid. Past employers, references, and evaluations on the other hand...that's what would interest me the most.

 

The random~ness of that...is what is scarey. That means all people that went their entire lives with great credit will be in a sense punished for everything that may have happened to them with the economy went in the toilet in the last 2 years . This ratio above seems to cover just about everyone whether it be a formality or if this person is in a particular sensitive position...

[BUENG1]

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.

 

The rationale is that people with money problems are more likely to steal be bribed etc. It is especially relevant with people who have a security clearance.

[BUENG1]

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 ???

 

Defense contractors and military mostly.

[Mary3]

The rationale is that people with money problems are more likely to steal be bribed etc. It is especially relevant with people who have a security clearance.

 

Well I could definately see if someone were driving around in an Armored Car and the company wanted to make sure they did not hijack one previously.....

[bluewolf17]

@OP

 

When I was hired for my current job, I had to go through six interviews.

 

I had a credit check, criminal check, background check, reference check and drug test.

 

They called everyone on my reference list.

 

For the record, in order to pull your report you must ask for written permission. I had to sign a form acknowledging that the employer was going to pull my credit.

 

I don't have a fancy job. I am a insurance/investment agent.

[carhill]

Credit checks are relatively cheap, as are superficial (not 'deep') criminal and background checks. IIRC, we paid around ten bucks each for pulling a commercial report, but of course pulled hundreds every month. A tri-merge was higher and an automated FICO pass/fail was lower.

 

One of my business colleagues had several thousand dollars stolen by an employee from the cash box (and it's not a 'cash' business) and I believe tightened security and employee checks substantially after that episode. IIRC, the irony was it was to be given out to employees that day as cash performance bonuses. Great way to reward employer generosity...

[Star Gazer]

Most social service agencies do not run credit checks or even pay for background checks....

 

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.

[Angel1111]

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.

[BUENG1]

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.

[amerikajin]

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.

[carhill]

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

[Lauriebell82]

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.