Slashdot Mirror
Dealing with Employers Who Perform Credit Checks?
Rick asks: "I recently accepted a Director level position at a small, 40 person, technology company. On my first day, I was provided with all of the standard employment paperwork such as the W2, NDA, healthcare, etc., as well as a document that is to provide my permission for the Company to do a comprehensive background check on me, including a credit history check. I am now in a stalemate position with my employer in regards to this background check document. I have refused to sign on the grounds that my personal credit information is of no business to the company and that they have no basis of need. The company argument (COO level so far, CEO is next) is that the company instituted this policy over a year ago for all existing employees and new hires, and to maintain consistency, every employee must comply. The company also maintains that the information allows them to identify potential problems with candidates or employees, in that people who cannot manage their own finances may not be good employees, or that those with troublesome credit may be more likely to steal from the company. The COO used less direct terms, but ultimately that was the argument. Have Slashdot readers successfully negotiated out of a mandatory employee credit check in the past? What arguments did you use?"
It is required for any contractor on the campus.
They whacked this on us last year as "new and different".
They included, but were not limited to:
Drug testing (one time, so far, not random)
Drivers License History/driving record check. (they did that one)
Credit Check (they claim that it is due to the chance of getting a corporate credit card)
Criminal background check.
"other checks as necessary".
That one, "other" I specifically crossed out when I signed my "permission' to do those.
My Company (the contracting firm) basically said "Do it, or leave".. so no, I had no real choice. The fact that I live in an "employment at will" state doesnt help either.. means i can be fired any time for any thing.
(Course, my company also believes that I can be terminated for things on my personal computer at home if I connect to their VPN network and have as much as threatened to do so. Therefore I refuse to connect from my home PC, even if it is required by my job.. I tell em I will do it at 8:00 am the next morning when I get on-site.)
Its an ugly thing.. but I strongly suspect that you wont be able to do much about it..
I want to see mandatory drug testing for congress, with printed pass/fail results, personally.
Maeryk
Feminine Protection? What is that? A chartreuse flame thrower?
**unless you're hiding something**
Let's apply this type of thinking to other areas. If they had said "We want to see your privates - after all, this can affect your medical claims, sick time off, etc..." you'd tell them to shove off, woudn't you?
It seems to me that a check for a criminal record would be more relevant, and more justifiable.
or, tell them, no problem, but you first want them to sign for permission for you to check their personal credit - after all, you want to know just who you're giving this information to, and you don't want it to be abused.
When they object, threaten to sue them for discrimination.
Yup. ..but if you've fucked up 4-5 years ago what do you do? I settled all my debts and they're marked as paid.
Another coworker was severly injured when he was 20 and had insurance, but the hospitial's accounting department ended up billing him. He handled it like a 20 year old and ignored it. Now he "owes" something like 20 grand, even though recent followups from the insurance company indicate that they paid. He's disputing it, but he looks like a dead beat right now.
The credit reporting system has problems and I'd hate to have my job hanging on the outcome of a credit report.
One compromise may be to give them a notarized letter stating your FICO score. Check out MyFico.com or other sources to get this cheaply. This will satisfy their question of good vs bad credit WITHOUT giving them the details of your credit history. For those not familiar with FICO scoring, it's a single number representing your credit risk ranging from 200 to 850 or something like that. Seems to be a good way to satisfy their intentions (if they have communicated them truthfully) and your privacy.
Barring that, I agree with another poster who suggests meeting in a room for a limited period of time with a printout of your credit report that you bring and take away from the meeting.
This wouldn't be so bad if getting a house didn't routinely follow getting a job...
-Looking for a job as a materials chemist or multivariat
People like you scare the hell out of me.
You let other people dictate to you the terms upon which you're allowed to do things. Even work. I agree that a criminal background check is probably worthwhile and a legitimate business concern - but a credit check? No. The only people to whom that should matter are those who can LEND me money.
I don't see this being any different than an employer asking to see what kind of food you have in your fridge, in order to determine if you're a healthy eater. If you're a conciously unhealthy dieter, it's probably reflective on your work habits, your personal life, etc.
No thanks. Take your job and shove it up your ass. I'd rather work blue-collar than submit to that type of fascist regime.
I love my country but jesus christ...people need to stop putting the almighty dollar above personal privacy and freedoms. It's like the executives who make these ridiculous decisions are so insulated from reality that they don't even realize that they're chipping away at the foundations of American life. I wonder how freedom-less life will be in 50 years.
I'm scared.
sedawkgrep
Is that a salami in my pants or am I just happy to be me?
I know I will be in the minority here, but if you don't like the credit check, why are you still fighting for the job? Is it the kind of place you still want to work? Admittedly, a credit check is a pretty random thing, but there's nothing that says it cannot be a condition of employment. Should they have it? I think not. Can they demand it? Absolutely.
The decision is simple: how badly do you want this job? Let that answer guide your decision. And if you take they job, and despise the policy, work to change it from within...
The cynic in me says "Poster has bad credit." Apparently you've already accepted the position, though, so the check doesn't stop you from getting the job. Be pleased you have one.
There are many ways to respond to requests like this one.
;-)
1) whine: not really a good solution, but a Slashdot favorite
2) ask why: much better, and the avenue which you took
3) refuse to comply: and live with the consequences. Of course, if they really want YOU, there is always the possibility of negociating your way out of doing it.
4) "forget" to fill it: they may never notice! (You know: "oh, sorry boss. I just didn't have time to do that. I'll just stop working on [insert important stuff with tight schedule here] and do it right away" or simply "Sorry, I forgot. I'll fill it this afternoon")
5) Check the privacy laws which apply. In my part of sunny Canada, even making such a request is ILLEGAL, which makes it a breeze to refuse.
IANAL, but I can advise you to get a boss which respects you enough to leave your credit alone.
You're not old until regret takes the place of your dreams.
I know this is common practice these days, but it bothers me because it has such potential for abuse. Employees are barred from asking your age, marital status, sexual orientation, etc. in an interview, but if they have your credit report, they can deduce a lot of this information. (What year were your college loans taken out? Do you have a co-signer on a home or car loan? What gender is the co-signer?)
How will you really know why you were declined?
When violence rules the world outside / And the headlines make me want to cry / It's not the time to just keep quiet
Comment removed based on user account deletion
Wow, you're clearly not replying to my original post, because you're waaaaay out in left field.
:)
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:) I'd hate to have to smack anyone else with a cluebat today!
1. Yes, I didn't like the fact that they did credit checks. Yes, I did apply for the job, and I *did* change their hiring process. Apparently I was "special enough"...
2. Although I was not the original Ask Slashdot submitter, my position coincidentally involved managing another employee. Coincidence is good, but I like people who actually read posts much, much better.
3. I can't direct my own finances? I guess you didn't see in the parent post that I had and continue to have very good (in fact, flawless) credit.
4. How can I admit to having financial problems when I don't have any? Let's see, My only debt is my car (and I own other paid off vehicles)... it is worth about $5000 more than I owe, and I'm ahead on payments. Hrm... Unless 'the finance book' has been rewritten lately, that would be called equity, which is a very good thing, credit-wise. Go Acura!
5. My claim was that my good finances were my issue, as it is private, confidential information, and my prospective employer was not a credit agency or licensed for any sort of financial business. Requiring non-employment-related, legally-confidential information is unlawful, even in most at-will employment states. Gotta love that little thing called "right to privacy"!
6. When I apply for credit with an institution licensed to provide credit, it is understood and assumed that a credit check is required! Common sense! EUREKA!
Next time, try reading the parent post before you reply.
.... um, i lost you after "0110100001101001".
No, it didn't make sense. Sure it may work as a deterent, but it didn't help anyone get out of debt. I believe that the poster was referring to this. In the debtors prison, there was no way to make any money. If you got thrown in prison for owing me 5 pounds, then there was no way to make that 5 pounds to pay me back. Meanwhile, your wife couldn't work because of the social structure of the times, so your son(s) had to try to make enough money to support the family and to buy daddy out of prison.
It was a stupid idea. What the poster was referring to is that not being able to get a job because of lousy credit is the same type thing. How are you going to be able to get out of debt if no one will hire you and pay you?
Privacy issues aside, the danger is too great that interviewers reviewing my credit history would make the wrong assumption that I incurred all that debt and that I would lose the job offer without being given any chance to explain the report. I would simply tell the employer that my credit history has suffered severe damage from my spouse and that I have no choice but to vigorously protect that information. If they protest further I will simply state that I am not open to negotiations on that topic.
Eternity: will that be smoking, or non-smoking? I Corinthians 6:9-10
I thought that any conditions upon which employment was contingent had to be disclosed prior to hiring. Every time I've taken a job, the various invasions of privacy to which I'd be subject were known before I got there.
It might be worth checking with a lawyer -- not to see whether the requirement is illegal, it's not, but to see whether the requirement can be enforced when it was not disclosed prior to hiring.
http://drteknikal.blogspot.com/
All they need do is state that the credit check is a condition of employment.
You're free to walk away.
That said, it's a pretty shitty practice, and if I had the option, I'd choose not to work there. (Of course, in this economy, you takes what you can get, and you likes it.)
For those that would die defending it, Freedom
has a sweet taste that the protected will never know.
There are two types of credit checks. The first type doesn't affect your credit. Credit Card companies use these for pre-approval offers. They will make an inquiry and it will appear on your credit report.
A credit check for the purpose of borrowing does affect your credit. Lawrence Lindsey, the President's former chief economic advisor got into a huge public brouhaha with Toys 'R Us over its credit rating practices. He was a Governer of the Federal Reserve Board at the time he was denied a Toys 'R Us credit card because he was shopping for a home loan at the time - he had too many checks on his credit report.
Now, I don't know which kind an employer does. I suspect the first (non-harmful) one because it doesn't involve an actual credit app.
Our credit reporting system is crap. Creditors have too much power. They can make you pay things you don't owe simply because it's cheaper than fighting them. My wife and I are this close (holding finger and thumb close together) to countersuing a doctor that has mistreated us, doesn't return calls, and won't even prosecute the lawsuit he filed against us. The $8,000 bill he says we owe was taken off of our report, but he can put it back on whenever he wants. Ack.
End Rant.
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Yes, it's a blog. Sorry if that offends you.
You (or howstuffworks.com) really need to qualify this one. Take a look at your credit report sometime. Holy Crap! Look at all of those credit checks! OMG, WTF is going on? Thus is the penalty of having good credit (not a "penalty" that applies to your credit score, but a "penalty" of annoyance). I bet you get pantloads of credit card offers in the mail. I bet many of them say "pre-approved" or similar. And you know what? Every time you get one of those, there's an accompanying credit check. None of those checks hurt you (and really, shopping around a loan doesn't hurt you as much as you'd think, either -- of course, if you do it right, it won't matter; get yourself a pre-approval from an underwriter, and then no other broker will need to run a credit check until you commit to the loan). I don't know for sure, but I'd hazard a guess that the type of check an employer would do would fall into this same category of lookups. Yes, you get penalized for getting many credit cards, for example, but the problem is not simply one of the credit companies checking your credit. You get hurt because you're decreasing your potential credit ($1000 credit in a credit card is $1000 less credit you can get for that auto loan or mortgage, roughly), you're penalized for age (creditors like seeing long histories of credit, so get 2-3 cards and stick with them; swapping out cards every year or so is bad, because you can't establish age), you're penalized for an increase in your debt/income ratio (why get a credit card if you're not going to use it?), and finally you're possibly penalized a tiny amount (1-2 points, rarely more) for having that extra check on your credit.
Consider it this way -- what looks better on your credit report? A steady (if new job) and an extra credit check by your employer, or no job but a clean record of credit checks in the past year? I'd choose the former, and anybody with a brain would as well.
(I'm not addressing the legal, ethical, or moral issues surrounding an employer requiring a credit check. I'm simply making the point that one extra credit check to get a job is not going to hurt you in any way, unless you're going through many jobs in a year -- and then you're going to be hurt more by insufficient length at each job than you are by the credit checks required to get those jobs.)
If the salary for the job in question is over $150k, there are even greater ramifications of this. They can do a financial background check in addition to what appears on your credit report, and anything they find can be reported to the credit agencies, and appear on your report *forever.* That's right, not 7 years, or 10 years as with bankruptcy, but forever.
The moral of the story is that in this age of high profile corportate corruption, etc., companies, ehareholders, and government agencies are doing whatever they can to protect themselves. In the wake of the Rafael Perez and Rodney King scandals, the LAPD even insists on a completely clean credit record for its recruits. A bankruptcy or other credit faux pas means no job.
It turns out they just did a criminal background check, which I can totally understand. I guess the difference here is that my employer told me about the check up-front before I made the move. It is fairly underhanded of them to get you in the door, then pull this on you. It also makes you look bad to the company because you don't want to offer this stuff up when everyone else has.
I guess the trick here is to not let them do it and still keep your job without everyone having meetings about you behind closed doors. Yes, consulting a lawyer is a good thing, just don't let them know you have one. I'm sure they would look at that as treacherous. You could appeal to them and let them know your "policy" is to keep your home affairs private and work affairs at work. Also pointing out that they didn't tell you of this requirement before offering you a job puts you in a really bad position. This would especially be true if you left another employer for the job, thinking you had passed all the requirements for the position.
Personally, if I had a way out, I'd walk. The thought process that an employee with bad credit is a suspect employee is somewhat anal. Execs at many companies probably have really bad credit....the only thing is that they do everything as a corporation so their personal credit isn't touched. Even filthy rich execs (like the ones at Enron) finance houses. Considering all the shady stuff these guys are into, how do you think they get past the strict credit requirements for mortgages? (For those of you that point out that they probably pay cash for the houses....no, they don't in most cases. It makes more sense to finance it because they can make more money with the cash in hand than they can having it tied up into a house. Paying cash for a house is something that benefits a retiree more than a rich exec.)
I agree. Since any credit check degrades your credit rating you should ask for financial compensation for the credit check itself.
I know about the point reduction because when I was a college graduate with no credit, I would get discounts from Sears and JCPenney's, etc., because they would give me 10%-20% discounts for "signing up for their cards" Since I had no credit (no student loan, no credit cards, no auto loans, etc.) I always got turned down and the 5-10min to hear that was worth the $20 or more I would save. That was, until I decided I really should get a credit card. When I started applying for real credit cards, they published the denial reason as "too many credit checks within the last XXX days."
Thus, you should ask the employer to pony up some $$$ if they want to hurt your credit rating.
On the privacy issue thing. I think privacy is overrated. Everyone screams "privacy" until something happens that they don't like, and then they're out digging dirt on whomever. For example: Presidential elections. You see the media tracking down the guy's third grade bully to go on air saying that he got hit in the eye once by the candidate. I protect mine within reason, but I think that where you spend your money ends up being a very public thing.
As an example, if you want to screw someone over, simply run several dozen credit requests against an individual (pretty trivial exercise). That alone screws them up.
Next, you just don't know - unless you request it - what's on your record. I've been turned over to collection agencies twice - and both times the companies in question owed me money. Letters with the name of large legal firms were neccessary to get the situation resolved. And that's becuase I was aware of the issues.
One of the more frightening 'hits' people take is through their good buddies, landlords. They move, believe they have closed their utility/phone/whatever, and the landlord doesn't forward the request for the last bill. The billing companies have no forwarding address ...
For comparison, the MIB (Medical Information Bureau) is only available to a select few companies. And they have a nifty policy ... you can use the information so obtained to start an investigation of your own, but cannot rely on the information they provide alone. Like, if someone applies for life insurance, and the insurer's query returns the minor detail they've had three heart attacks in the last year. If the insurer then requests the reports from the hospitals, well and good. If they deny you based on the MIB info alone, and get caught, the fines and possible loss of access are staggering.
Unfortuantely, a similar idea for credit ratings was shot down. The companies who use these credit scores benefit in two ways by not verifying a 'bad' score - no investigation cost, and, for most of them, charging a higher interest rate.
So the industry is set up to fuck your rating, and reluctant to do anything about it. I'm with the original poster, tell the company to get stuffed. It's the old "It came from the computer, so it must be correct!" whine of people who don't want to take responsibility for a system they know is broken.
While in the US it's probably next to impossible to get out of the situation like this when the words "our policy" have been pronounced (I mean, other than trying to do it through a lawyer which is probably not a good idea if one wants to continue his career at the place), I believe that it's still possible to find a place that does value the specialists just for their professional background.
Personally, I find the idea of credit check as a condition for building employer/employee relationship very insulting. Even setting aside the issues of people with zero credit history because they're new or because they prefer living with a positive balance on their account, I can imagine descent people have nasty spots in their credit history. I know very good professionals who are amazing (friendly & dependable) people, who had severe credit problems because they had gotten into very nasty family health issues in the U.S. In this country (IMHO, of course), noone (aside from very rich people) can be protected from this or racket-like legal action shaking money out of normal people by just forcing them to defend their case when they hurt noone. (This is one of the reasons why I wouldn't like my kids to grow up here and why I have never attempted to achieve permanent residency here.) I'm not saying the U.S. is bad in general, I'm just saying that for me the cons outweigh the pros.
I would have refused that job unless the guys were sane enough to take my argument and take back their stupid "policy" issues at least in my case. If they don't respect my privacy concerns in this matter, they can go hire someone else. My current employer didn't ask me these questions, and this is actually the 1st time (this article) that I've learnt this happens. I mean, I could have imagined something like this in the banking industry, or accounting (maybe...), but not IT.
VKh
For six years I worked for an insurance company who based their entire pricing structure on the fact that credit scores are great indicators of future behavior. In a large (200K+) population of customers, the ones with higher credit scores made fewer claims. Period. They went so far as to separate people into 12 different levels of risk based on credit alone! Clear patterns only emerge in LARGE groups of people, not in individual isolated cases. Consumers and legislators hate it, but insurance companies LOVE credit scores because they are dead accurate in classifying large populations.
The key here is that credit scores only become a useful indicator as the population grows. If this employer is small then they are wasting their time. But, if they hire hundreds of people a year then it makes perfect sense to screen with credit. In this particular case the credit check had the unexpected benefit of clearly identifying the poster as self-important "director-level" whiner. Who would want to hire someone who pulls a stunt like this right out of the gate?
I'd rather have a full bottle in front of me than a full frontal lobotomy.