I can understand background checks of applicants. But why do they want to do a credit check?
Employees with serious credit problems and high debt are more likely to steal or embezzle to cover their financial problems.
Exactly. I had this done when I was applying for a job at an investment bank, and I asked them why they did it. I’ve never had it done when applying for a job that wasn’t related to finance though.
Be glad it’s just probably nothing more than someone having a quick glance at your TRW and a scan for any courthouse records (do you have any past convictions, warrants, etc?). For what I do, I had to go through a regular background / financial check, and most recently, had to go through a check by the FBI.
Of course, past performance is not a guarantee of future performance, and I’ve run across a couple of people that did pass background checks, but still wound up receiving a matching pair of steel bracelets and all-expense paid stay at the Graybar Hotel after stealing every third cash deposit that they saw.
BTW, bankruptcy cannot be one of the criteria they use when using credit history for employment evaluation.
BTW #2, money is not the only thing you can steal from a company.
Cite?
I’m positive you can not be registered with the NASD with a bankruptcy within the last ten years.
I read my post and need to clarify.
It (bankruptcy) cannot be the only criteria. However, it is sort of a catch 22 and/or hair splitting, because most derogatory data is lumped into any bankruptcy proceeding, so when a credit report is pulled by an employer and a bankruptcy is present, the report will likely contain accounts incuded in the bankruptcy and other derog that is probably not listed as included, but probably is. You could place the burden on the applicant to prove each item is included, but it might be best practice to consider the applicant a ‘debtor’, and consider all derog accounts included in bankruptcy :
The law provides express prohibitions against discriminatory treatment of (bankruptcy)debtors by both governmental units and private employers. A governmental unit or private employer may not discriminate against a person solely because the person was a debtor, was insolvent before or during the case, or has not paid a debt that was discharged in the case. The law prohibits the following forms of governmental discrimination: terminating an employee; discriminating with respect to hiring; or denying, revoking, suspending, or declining to renew a license, franchise, or similar privilege. A private employer may not discriminate with respect to employment if the discrimination is based solely upon the bankruptcy filing.
As a consultant, I find the whole thing about doing credit checks to be rather disturbing. This has overflowed to the point where when I do an engagement, the client wants to do a credit check on me. Now I know that multiple credit checks cause my personal FICO score to be impacted, so I wonder how much more I am paying for things (like loans, insurance, etc) just because someone decided that credit score was so useful for everything these days.
Only in the case that the checker is actually extending you credit (a “hard pull.”) A “soft pull”, used to mail you those pre-approved credit card letters and do background checks, does not affect your credit score.
Unless it’s for a job with the Government. When I was polygraphed last time, the polygrapher asked if I had any debts over $5k; when I replied in the affirmative, he strongly recommended changing that, even though I’m current on all debts.
I guess what bothered me is that they wanted my SS# on a big application on interview day. I had thought maybe I shouldn’t have to give that until later. However, I did it because I got the interview through someone I really trust.
Last year I got a copy of my credit report and found there were a bunch of credit cards on there that I don’t even have anymore. I thought it would be a good idea to cancel any we don’t use. So I did. Later I read that you should not do that. Oh well, too late now.
When my husband graduated from college he had a summer internship at the CIA. So he had to fill out a huge application. One day a guy from the FBI showed up at my apartment door to ask me questions about my boyfriend. I gave him the entire scoop. Yes, he gets together with his friends on Saturday nights and they play Monopoly, drink Pepsi, and eat brownies!
I let it slip that we were getting married. Pretty soon one of my husband’s friends had the FBI man at his door asking questions about me.
Well, he got the internship. We spent the summer in Alexandria.
Oh, we got married three days after graduation. We immediately drove to Alexandria (from Texas) and looked for an apartment, dragging a U-Haul trailer on the back of a Maverick. Would you believe that we had to have proof we were married to rent an apartment? This was in 1981. I had nothing with my new name on it. So the apartment manager called the campus ministries office at the college where we were married and luckily they remembered us because I fainted at the altar.
The illegitimate reason is that this check can often be used to exclude the poor, blacks, immigrants, and other ‘undesirables’ from jobs at your company. A credit check usually turns up something that can be used as an excuse for a bigoted employer to reject them. It’s good cover in case of a job discrimination lawsuit.
This is the illegitimate reason – people have already given you the legitimate ones. Most employers probably would never consider this use of it at all.
Not proper, but it does happen.
Good to know. Thank you!
What? Aren’t most people with a home or a car going to have debts over 5000? Why is that supposed to be a problem? In fact, I would think someone with a home or car loan (who is current) would be a better employee. More responsible and less likely to up and quit and what have you.
Is it true that people with bad credit steal more? How was Ken Lay and his band of thieves credit. I could list hundreds of cases. Look at our thieving politicians.What appears to be superficially logical often is not.
Low income, and poverty in particular, is highly correlated with both bad credit and crime rates, so in terms of numbers of crimes, yes: people with bad credit steal more. They also commit more violent crimes, which workplaces don’t like, either.
Whether this is true in terms of absolute dollars, I don’t know: certainly most folks don’t have the opportunity to steal hundreds of millions of dollars very often. But I would guess that since such “huge” crimes are rare, that the large number of smaller ones add up to more.
The big problem, of course, is that in the US, poverty is also highly correlated with certain ethnic groups, leading to the issue t-bonham@scc.net posted about: using the credit check as a proxy for bypassing illegal discrimination laws.
I’m pretty sure what you meant was:
…as a proxy for illegally bypassing anti-discrimination laws.
People with good credit steal in much greater amounts. From Enron,Franklin Bank, Vivendi,Merrill Lynch,World Com,Andersen,Haliburton,Solomon Smith Barney.Citigroup,Cigna,Aol Time Warner,Accenture To name a few.Yep it sure is rare.
White collar criminals represent a vanishingly small fraction of people with good credit.
Yet steal so much more. They often get their sentances to be shielded from the public.
Vanishing ? Why say that?