Should employers be allowed to do credit checks?

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http://www.washingtontimes.com/news/201 ... t-history/

Many people have fallen on hard times. If someone loses their job, it can be pretty easy to fall behind on bills... All employment credit checks do is keep people trapped in a hole they can't get out of, just because their job was gone one day... which, in reality, isn't their fault.

Just like when applying for a loan, it is almost as if you have to prove you do *not* really need one in order to get one!

However, that article is far too brief to offer any real perspective here, and nothing has been said about the burden placed upon employers who might even have to hire more office staff in order to deal with garnishments and/or typically-financially-troubled employees missing work to go do a little jail time for non-payment of child support:

>> a legal summons or warning concerning the attachment of property to satisfy a debt;
>> a stoppage of a specified sum from wages to satisfy a creditor or a legal obligation.

Overall, most places I have ever worked were usually fairly interested in hiring hungry people unless they were obvious transients.

Well, really it brings up the question of how much employers have the right to know. Unless I'm applying for a job managing a bank (or something similar), why should employers have the right to know my entire credit history? There's absolutely no reason for it. It's none of their business if I was late on a utility payment or took out a loan... The government already intrudes in our lives too muc, so why do we allow corporations to do it? Next thing you know, they'll all be wanting your medical history, your political information and who knows what else...

The only valid reason for doing a credit check for employment is if you are going to be entrusted with valuables that could easily "disappear" and they don't want someone who is likely to be under undue financial pressure.

There are also some professions where having filed for bankruptcy would be a disqualification for the job and a credit check is the only way to know if you told the truth about having not filed for bankruptcy.

I can also see an employer wanting to avoid dealing with wage garnishment (a huge legal and accounting headache for them).

Still, I question why they really do it, and frankly, they should be legally obligated to tell you why they are going to ask for one, what in your credit report would be used against you, and a written affirmation that nothing outside of that information can be used against you (like your credit score, which could suck even though you have always paid your bills on time). I think in jobs where valuables will not be handled, you should have the right to refuse and they not be allowed to hold that against you.

I agree ... and this morning I woke up wondering what you might have to say about this!


Just some more of the "Haves" who *must* work isolating the "Have Nots" whose presence might remind them of their delusion. And besides, no corporation has a conscience.

i had a credit check done, at my goverment job. i questioned it because i did not understand the necessity. but i do deal with money in an indirect way i suppose.

Why not. Employers can check references. Why not credit status and payment history. That is an indication of character.

ruveyn

I don't think they should, but I'm sure their counter-argument would be that a credit score correlates with general responsibility, and therefore they have a right and a need for that information in all cases.

As to why I think they shouldn't have access to it:

1) It increases the penalty for taking risks: say you start your own business, and it fails. Then when you're back in the job market you get penalized again.

2) A credit score/report may not communicate parts of "the story" that may be important. I.e. bankrupted by gambling, or medical bills? The default assumption will be that a bad credit rating is due to irresponsibility.

3) I'm a fan of people getting second chances to get their life together, and a long permanent record can prevent that. (Sort of like a joke about an interviewer pulling out your "permanent record" from kindergarten.)

I can see this necessary if working in banking and finance, where you need to be trusted with money.

However, for many jobs this is really unnecessary. Being foolish with money does not make someone unqualified for a wide range of jobs. Hell, it works good if you work for the government actually.

Yeah, but it shouldn't be a disqualification if everything else checks out. A person can be a really hard and honest worker but not really be all that good with money. Besides, even individuals who usually pay their bills and taxes can get f**ked over by the credit system.

Say, theoretically, there's a family who isn't exactly wealthy, but they managed to pay their bills and whatnot. The man works at a typical office-cubicle job, and the wife stays home and takes care of the kids, which some still do. Well, say one of the kids gets into an accident/contracts a major illness and has to go to the hospital big-time - we're talking months. At about the same time, the father gets laid off due to downsizing - nothing he did wrong on his part, just that the company couldn't afford to have him on their payroll. The family's only source of income is gone, and the hospital bills for the kid pile up, causing their credit score to go into a downward spiral.

Now say the guy finds another job, similar to the one he worked at before but at a different company. He has a good work record says his former employers, but his credit score is down the toilet. Should he be denied the job based on his credit score, even though it really was due to events beyond his control?

I think that any employer that includes good credit as a requirement for hire should be forced to have some kind of "act of God" clause where they can still hire a person with poor credit if a) all his/her other references check out, no criminal history, etc., and/or b) the person has a legitimate explanation for their poor score such as the situation listed above.

If an employer can check to see if a person has been convicted of a crime why can't he check to see if some kind of legal process to collect a debt has been initiated against a prospective employee?

ruveyn

Because a criminal could actually be considered a liability. You don't want a thief operating your cash register, or a sex offender working with kids... Bad credit doesn't mean jack. My dad has had pretty lousy credit in the past, but nobody would say he's a bad worker...

Bad credit doesn't mean you're a thief, or irresponsible, or a bad worker. It would be the exact same thing if companies based hiring on what brand of clothes you wear. That's my business, not theirs.

If I want someone to work in my bank, I do not want a deadbeat. Period. There are some occupations where the ability to handle finances responsibly is relevant to the job.

ruveyn

Way back in '76, I once got fired for an "unstated reason" after declining a 50/50-paid (employer/employee 50/50-premium split) health insurance plan and asking to instead have the employer's part of that as a raise at the end of my first 90 days!

Yeah, but if you had been LISTENING, you would have heard several people tell you that having bad credit is not necessarily mean you are financially irresponsible. Credit is basically the same thing as trust. You can build up trust, but once something is done to break that trust it's really hard to build it up, and it never reaches the same level. Credit works the same way, only with credit it isn't necessarily things YOU do that causes it to fall, it can be simply circumstances. See my above theoretical scenario.

You're trying to justify your point from the perspective of an employer, but before you make things black and white, try to see things from the perspective of a potential employee. Say you went to college and got a summa cum laude degree in accounting, and that you were really good at it, and you even did an internship at a bank during your senior year, but then as you are walking across the street after your graduation, you get hit by a bus. You are physically unable to work for a year as a result, and the hospital bills put you into debt, screwing what little credit you had. Now imagine after your recovery, you're applying for an accounting job, you have great references from your internship and your education level is perfect, but you don't get the job because you have a bad credit score.

THAT'S what I'm talking about. People with bad credit are not necessarily deadbeats, or poor with money. I'm not saying that checking credit scores aren't necessary, but when doing so you have to consider the "act of God" scenario. s**t happens, and a lot of times that keeps people, good people that would have great credit otherwise, from ever being able to have good credit because of things beyond their control.

Well, the issue is that bad credit can mean something. Bad credit can mean that one has money-management issues that could lead to desperation to get more money, so that way one can drive away the bill-collectors. It can mean some looming bad habit that could spill over onto working hours. It is hard to say that it is not a generally bad sign. A criminal could easily not be a liability, after all, the person could have been young or the crime could have been silly. There are some people who are sex offenders because they gave oral sex(a law that was on the books in some areas), but not because of anything more substantive, so what is wrong with such a person working with kids? I don't see one, but we still discriminate.

I really do think that this can be relevant. I don't think it is the most relevant thing, but we don't know how much employers weight these issues. As it stands, all this is is just another form of statistical discrimination, and everything an employer uses is going to be statistical discrmination, as they cannot directly evaluate the worker.

That being said, there are worse things one could do:
http://www.cracked.com/article_18737_6- ... u-job.html