Question:
Why on EARTH do prospective employers need to run a credit check? Why does it matter? Seems nosy to me.?
auntymapuana
2006-04-01 20:36:10 UTC
Why does what my credit look like even matter to an employer? THAT IS THE REASON THAT PEOPLE NEED JOBS- TO PAY THEIR STINKIN' BILLS!!!!
Ten answers:
GordShumway
2006-04-01 21:27:27 UTC
I agree, it does appear to be nosy, but a prospective employer is unlikely to use that information alone in making a hiring decision. And they can only run the credit check if you say it's okay. A credit reporting agency can't supply information about you to a prospective employer without your consent.



The introduction below is taken from an article titled "Credit Reports and Job Hunting" By Les Rosen, Employment Screening Resources Reprinted from HR.com. I've posted the link below if you'd like to read the entire article.

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Many job applicants are discovering that employers require pre-employment credit reports before they hire. For many companies, a credit report has become a screening tool to evaluate a candidate and to exercise due diligence in the hiring process. But for job applicants, a credit report can feel like an invasion of privacy or a violation of their rights. However, job applicants have substantial legal protection concerning the use of credit reports for employment. In fact, an employer cannot obtain a credit report without an applicant's written permission and cannot use it to deny a job until the applicant has had the chance to review the report



Employers seek credit reports on job applicants for a variety of reasons. Some employers utilize a credit report to verify that an applicant is responsible and reliable or to confirm identity. Other employers are concerned about hiring persons who cannot manage their affairs, or whose monthly debt payments are too high for the salary involved. Many employers limit credit reports to management and executive positions, or to positions that have access to cash, assets, a company credit card, or confidential information. Employers are well advised to run credit reports on bookkeepers or others who handle significant amounts of cash.



However, employers should approach the use of credit reports with caution, and have polices and procedures in place to ensure that the use of credit information is both relevant and fair. An employer should first determine if there is a sound business reason to obtain a credit report. Unless the information in a credit report is directly job related, its use can be considered discriminatory. For example, running a credit report for an entry-level person with low levels of responsibility or no access to cash is probably not a good practice. Unnecessary credit reports can discourage applicants from applying, and running mass credit reports on all applicants, regardless of the position, can have the effect of discriminating against certain protected classes. In addition, employers should avoid making negative hiring decisions on information that is old or relatively minor.
?
2014-11-22 01:27:31 UTC
A credit check depending on the circumstances can show non relevant info. If you look at the statue of limitations for your state and see that say the statue of limitations for a credit card bill has passed, many times the companies will still mark on your credit report bad things. This doesn't make any sense as the statue of limitations has passed often in some states but it has not necessarily been 7 years. For example say that the statue of limitations for a credit card debt is 4 years in your state but someone keeps putting things on your credit report saying not paid, you could explain that the statue of limitations has run out so you are no longer liable for the debt. If the prospective employer won't let you explain, then its possible that they won't listen to reason and you might not want to work there anyways because of this as they show a lack or reasoning.
captainfeatherswoardnot
2006-04-02 05:06:52 UTC
You feel like your privacy has been violated by total strangers. The problem is if you delicately, tactfully, and respectfully decline to provide the information when it is asked for, you get labled as uncooperative, someone with something to hide, etc.



Companies want to know that the people they hire are upstanding citizens who pay their bills on time; are not in a financial situation that would 'motivate' them to unlawfully take from the company.



If you haven't gotten a copy of your personal credit reports from all three agencies, you need to do that. That way you will know what the potential employer knows.



You will also see if there are transactions or outstanding debts showing that have actually been paid off. If you have credit cards you can cancel, do so and immediately write the credit reporting agencies advising them of the cancellation.



Credit card companies don't send the cancellation information to the agencies right away; it may be months before they act. They can make your credit look worse than it is.



One other suggestion, write your State legislator and your Federal legislators. Tell them you think the credit request is inappropriate and ask them to change it.



Write the Department of Labor as well. Understand that our Federal legislators are all pretty ineffective so nothing will be done but at least you have voiced your complaint.



Good luck. Remember, always pay your credit cards on time. If you are having problems, contact the credit card companies, in writing, and ask to talk to them about changing your payment arrangements.



Contact them as noted below.
jennnnn
2006-04-02 04:41:57 UTC
I am actually going to school to become a loan officer, and boy do I have some information and insight for you.



Your credit report reveals your character. If you are up to your ears in debt, first of all, the employer will think that you are more likely to steal from them because you are desperate. Second, if your bills aren't getting paid on time, it will look like you are irresponsible and they don't want people like that working for them.



If you have a low debt to income ratio and your bills are getting paid on time, it will show the employer good character, and that you are probably a reliable person to hire for their company. It also shows your public records so if you did something bad within the past couple of years they might be able to see that as well.
elizabeth_ashley44
2006-04-02 04:48:57 UTC
It makes sense, but there are other ways to find out what kind of character a person has. Reference checks, background checks, interviews, and employment history come to mind.



My suggestion is that if an employer insists on running a credit check, talk to them openly about your credit history. You can turn any negative into a positive if you slant it the right way. Your 12 maxed out credit cards were a learning experience, and you're glad you've matured so much since then and have gotten yourself back on track. Right? ;)
Bratfeatures
2006-04-15 02:34:16 UTC
They run credit checks on potential employees? That's harsh, I've never had this done to me, I've only ever been asked to sign something so that a potential employer can do a criminal check, which is kinda different. I live in Australia BTW, if you object so much to having a credit check run, maybe you should move here!
markus
2006-04-02 04:46:35 UTC
I've NEVER EVER heard of an employer asking for a credit check....not in my life. It sounds like a possible scam. Beware....they like to take advantage of people who don't know better.
2006-04-15 19:17:53 UTC
If you cant handle your dam finances properly how on earth are you going to handle the respondibilites of a company???? Non payment or late payment shows your lack of planning and control over your finances...why should they trust u with thier company when u cant handle YOUR OWN finances????
crao_craz
2006-04-02 04:37:13 UTC
If you are not responsible at managing your own indebtedness, the employer may wish to determine whether you would be responsible on the job.
Mom
2006-04-02 04:42:13 UTC
.They want to make sure that they don't have to deal with your pay having a garnishee


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