My friend and her husband are nearing the end of going through Chapter 13. She was wondering if possible employers will look at this fact in her credit history and hesitate to give her a job. She has a job but recently interviewed for a new job and hasn’t heard back from them yet.
What do you think?
Yes, it most definitely can. More and more employers are using credit checks in their employee screening processes. I haven’t filed bankruptcy, but I have a really terrible credit score (my first wife quit her $30K/year job about the time I was laid off from my $70K/year job yet kept spending like we still made $100K when we were living on $28K and left me with over $100K in credit card and automotive debt). When I was hunting for jobs, I was disqualified from a lot of them based on just that. A lot of staffing agencies and employers asked if I had a credit score over X before they asked if I could pass a drug test. This was for a wide variety of customer service positions, not just financial-related stuff - telecom tech support, ISP customer service, etc.
I’ve known three people who declared bankruptcy. Two were quite irresponsible, one was a total idiot. I really can’t blame employers for looking askance at this.
If it were me, and there was a really good reason for it (wiped out by medical bills for instance) then I’d be proactive about getting that information to potential employers.
I’ve only had one potential employer ever even ask about my credit history. I got a bunch of forms prior to the interview from the recruitment agency. I read the “background check” release form and didn’t bother to sign it (I thought it was going to be for a criminal background check, which I would have been more or less okay with, but they wanted credit history and medical records too – which I thought was none of their freaking business). I figured if it came up, I’d just say I wasn’t comfortable with the release as it was, and I’d sign a different release if it specified a criminal check only. Turns out, the interviewer didn’t ask for it, and I didn’t offer. Didn’t get the job, but the release form had started giving me bad vibes about the place already so I don’t think it was a great loss.
I don’t think it will come up often, assuming they’re white-color professionals (and assuming, I suppose, that the job in question doesn’t relate directly to the handling of company money). If it does I’d see it as a sign that maybe I don’t want to work there.
Your credit history/rating can affect your ability to secure employment, but a bankruptcy filing/discharge/whatever, cannot affect your ability to secure employment. Well, not to say some mo-ron personnell departments don’t follow these guidelines, but I am actually surprised by the number that do.
If you have a bankruptcy on your credit report, potential employers may not consider that when reviewing your credit. Ensure all accounts that are included are showing as such on the report before applying for a job, and check to see if the public record is there. Bring all paperwork with you.
I totally disagree. Look at the extreme–working at a place where everyone you’re working with has horrible credit scores. Your bosses and coworkers, all of whom can’t manage their own lives well enough to pay bills on time and maintain a decent credit score. I don’t want to work in a place like that. I’d actually feel good knowing my credit, along with everyone else’s in that organization, was being checked.
I’m actually trying to figure out, from a potential employer’s perspective, why I wouldn’t want to check an applicant’s credit history. Why in the world would I hire someone with a horrible credit score? That usually indicates someone who has poor judgment and makes bad decisions. Am I going to trust that person with the company’s money (I mean, just filing a travel claim to be paid from company funds entails a level of honesty and responsibility), or trust that employee to look out for the company’s best interests?
Sure, there are exceptions, but I think, on the average, you don’t wind up with a really bad credit score if you have a good head on your shoulders, are honest and law abiding, and make decent decisions with your life. Many insurance companies use credit to help determine risk and responsibility. Why shouldn’t an employer?
Or else it could mean that someone got hit with a major accident or illness while not having health insurance, which is not all that uncommon in this country. It doesn’t really provide useful information in this context because a credit report won’t say why their score is so bad. This runs the risk of not being hired for things that are completely irrelevant to how well the person would handle the job, which is unethical and in some cases illegal. And in most cases if it does end up being illegal, it’s probably not worth the time and hassle for someone to sue, so the company gets away with it. If a company is trying to get away with it, yeah, that makes me think they’d be @$#@s to work for.
That and I think that my personal life, i.e. anything that happens beyond the four walls of the office, is none of my employer’s business. If there’s some sort of impact on how I do my job… well that is within the four walls of the office, and the only thing they have a right to complain about.
The factual answer is that substantial numbers of employers do run credit checks.
The mere fact that you are or have been in financial straits is potentially quite relevant, even (or especially) in white collar jobs, and the reasons you were/are in debt don’t really matter.
People who are acutely or chronically in debt may (or may not, but it’s the employer’s right to handicap this) be more prone to making risky decisions or outright embezzling to cover their debts. I’d want to know if my employee were flirting with or had undergone insolvency, were a chronic gambler, had a drug habit, etc., for this reason alone.
A credit report isn’t going to tell you if he’s a chronic gambler or has a drug habit. A criminal check might.
It’s actually quite the opposite of this. The credit report we receive does NOT tell us the applicant’s credit score. It just lists the accounts and their balance/status. When we see someone with a lot of medical charge offs or even utility charge offs, we don’t think anything of it. When we see someone with a $5000 credit card charge off, that gives us more pause because we work directly with credit cards.
Financial problems can prevent you from being granted a security clearance, which is a requirement for some jobs.
I think filing for Chapter 13 was because of a very bad decision made by her husband years ago that they just couldn’t get beyond and then some credit card debt built up. They finally faced up to it.
It seems to me that the fact that they did what they needed to do about it would be a good thing.
She would not be working with finances but with words. Lots of writing is what she does.
Do you think she should contact the employer and be direct about it? Like “I wondered why you haven’t contacted me; are there any other questions I can answer that would help you make your decision?” Maybe she should not mention the Chapter 13 thing.
Well, I’m positive that in the brokerage industry you won’t get a job with a bankruptcy on your credit report.
I’d imagine other employers use them as a way to screen out some applicants. Similar to asking for a college degree for a job which doesn’t require one.