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Newest Job Qualification — A Good Credit History
Alien54 writes quotes an article from The Day that says "In the past, only banks and financial service companies routinely ran credit checks on potential employees. But employers in other sectors increasingly are including [credit checks] in the screening process to assess applicants' honesty and integrity, traits not readily gleaned from a résumé. US employers' use of credit checks increased 55 percent over the last five years, according to Spherion, a recruitment and staffing firm with offices around the country.... "The credit check has become a general measure of responsibility and organization," said industrial psychologist Carl Greenberg, senior vice president of Spherion. "If you cannot organize your finances, how are you going to responsibly organize yourself for a company? Organization is a measure of responsibility."
Is the good credit history from rich parents or hard work.
Is the bad credit history from circumstances outside your control, or the inability to control spending.
Most people I interact with have no spending control, they blame their poor credit on things happening, not their failure to have an emergency fund, or that they eat out 4 nights a week, have 2 cars, a boat and a pair of motorcycles.
I'm an international student studying in America. My credit rating is therefore practically zero, because I have no fixed long term address in the USA, few assets in the US, etc. To get a contract for my mobile phone I had to put down an extremely large deposit precisely because I had no credit rating. One of my concerns would be it can take a very, very, very long time for someone in my position to build up a good US credit rating, if even my rating at home is quite good...
My buddy wanted to be a cop, long story short his credit was bad because of his friend, and when the did a credit check they told him he cant have the job.
Turns out you're most likely to accept a bribe with bad history.
Is that really what happens in America??
Perhaps, then, the employee is choosing to disqualify themselves by showing sufficient lack of common sense that they voluntarily live somewhere without a health care system?
They have to, by law. Even if they didn't, you would see that they accessed your report when you get a copy of your yearly free credit report.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
I was an irresponsible youth with a drug habit once upon a time. During that time, I managed to ruin my credit rating pretty thoroughly, and it remained tarnished during the period when I'd got my shit together, and was working in the IT industry as a credit controller. I was extremely good at my job, which was enforcing business to business credit terms, despite having shockingly bad personal credit. Professional ingetrity and the ability to manage your personal affairs aren't necessarily related. I don't rate this as a valuable selection tool.
I call bullshit. This is an unadulterated power play and invasion of a candidate's privacy.
My guess is you have a piss poor credit rating, or at least not optimal!
Why the hell should a company hire you without doing some background checks. If your a clerk in a store, you don't want to hire someone just out of the slammer for cash-theft. As a consumer, you would not like it if the people freshly out of jail for identity theft were processing your credit card apps would you?
Then why the hell do companies place people in positions of influence and power when not organized enough to balance their check book or don't pay their bills on time? Maybe at some point they will not pay you?
IT people with long careers summarily right-sized out of their jobs
Now if I saw a person who was right sized, and 6 months later the credit rating remained 100% I would seriously consider the person. Why? Simple, the person planned for it and still came in on time paying the bills. Indicates he isn't over cafinated hype junky operating in a delusional dream state missing comitments.
I also suspect some companies would hire those with poor credit ratings. Why? It is much easier to keep someone under their thumbs in bad working environments if they have to have that pay check at all costs to remain solvent.
Yep, I am in I/T.
At least, the father of little Suzy exists. For all practical purposes, I don't. It has been indicated to me (and I checked it) that I don't exist in any credit-reporting databases. My SS number and name are nowhere to be found.
How was I able to achieve such a feat? Even since I came to the US back in 1995 I always paid in cash or personal check. Some large amounts, such as school tuition, were paid by check; everything else - including rent and car - by cash. For online shopping, I use my debit card. At one point I was stupid enough to apply for a credit card, at which point - having no credit - I've chosen a secured credit card. I haven't gotten it because the bank (Chase) couldn't verify my identity, despite me sending in the copy of my driver license and SS card.
At this point, I've got a good job. As such, I don't consider not being able to get another job to be high enough price for being outside of the credit system.
We don't need credit checks for jack squat. We need criminal state & FBI background checks and that's it.
I find your argument dismissive and biased. While I can't definitively promote credit-check based employee selection, your argument provides almost no argument against the option.
Consider the job of a successful interviewer. You first wish to weed out criminals, illegals, and if you can, drug addicts who are likely to go into rehab, or become less effective of an employee. While you can not discriminate, it is your fault if the company goes under because it's run by a large enough percentage of dead-beats. You have to determine if an otherwise apparent dead-beat is honestly making recovery strides and thus is worth the risk. Just like a bank has to determine if you will likely default when they give you a car loan. The difference is that a bank can charge a higher interest rate to mitagate the risk.. An interviewer does not have continuous flexibility in what position they can put you in (especially if the interview is for a specific job).
There is adverse selection when it comes to the interviewing process.. The prospective employee is at their best at the interview.. They are the best dressed, the best attention-span, the best attitude.. There is a sense of fear in most subjects. The resume is potentially padded with semi-truths.. The references may not be who they are declared to be (a super-visor may actually be a co-worker). Former employers are not allowed (by law) to hurt the former employee's opportunities for new work, so they can't just say that the employee was a dead-beat, never showed up to work, had a bad attitude, was disruptive of other worker's productivity, was slow to train and incompentent. So as an interviewer you have to expect a certain degree of superficial gloss.
So the CV, the references, the criminal back-ground check are the current tools. But there is a science that works against the interviewer (much like the political process which convolutes the voters decision making). It often comes down to presence and personality.. Did the interviewer like you. Which I think is a bull shit reason to get hired (unless that's part of the job description).
As an interviewer, knowing that the particular position I'm looking to fill has a high degree of gloss and few differentiating metrics, I would be starved to find new methologies. MicroSoft and other's utilized a type of IQ test. But do you really need high IQ people flipping burgers? But we don't chide at the IQ test because of our self sense of vanity - sure we'd like everybody to be smarter.
Yet somehow your credit history - something you DID have a chance to affect is somehow detestable?
Perhaps I could see anger over your medical history being a deciding factor (ops, you're going to cost us a lot in heart related problems, so we won't hire you). Mainly because you had no way of affecting this (except perhaps diet and excercize).
So lets say that your credit history became a deciding factor between you and one other person (anything less is too indeterministic to claim discrimination against). If you knew that your credit history was a determining factor (and you would have to give permission to do such a thing), then you would know the major obsticles in your past, and you could outline them in the interview process.
If there was a bankruptsy because your bitch ex wife emptied your bank account, ran your credit cards to full, and took you for half of what was left, then say so in the interview. If the report can show this as a singularity, then you should be fine.
But most likely, you were careless more than a few times and didn't make a payment on time. Perhaps you're an obstinant dick-head and decided that the most appropriate way to contest a credit charge was to never pay that credit card again. While you may feel justified, banks don't.. And as an interviewer, would I feel that you'd be likely to "dick us over" as well? I regularly see a
-Michael
One could argue that capitalism will take care of any company that passes over qualified applicants because of a B.S. measure, so long as their competition does not do the same thing. I would keep government regulation out of it unless the practice is so widespread that the free market cannot work it out - for instance, hiring on the basis of race needed government regulation because it was so widespread. Not enough employers bar bran eaters to make it a real problem. On the other hand, if businesses that do scan credit reports do better than businesses that do not, you don't really need a scientific controlled study to draw a conclusion. The practice will become widespread because the businesses that do not practice it will be driven out of business.
My suspicion is that this is yet another corporate fad that will fizzle out. It probably appeared in some bullshit magazine that all of the H.R. executives read.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
My kneejerk reaction is, like most people, to envision the guy deep in debt as a shady, irresponsible person, and the former as a responsible, librarian sort. Yet I realize that is 99% because that sort of image has been pushed on me by the industry.
In reality, barring any actual metrics I think there is no way of saying. It's entirely possible that the former is so paranoid about their credit score and social standing, that they embezzle, while the latter is desperate to keep their job to try to dig themselves out of their hole, and wouldn't dare offend their employer. I mean when you hear about embezzling, one often hears about people embezzling hundreds of thousands of dollars. Surely they didn't use that to pay off their delinquent student loans (indeed, usually they bought lots of properties, having investments -- they're models of credit worthiness).
Get an American Express for students credit card. They'll give it to you. Use it responsibly (i.e. don't forget to make a payment every month), and watch your credit rating rise ... I've done the same, and got to a point were every week I was getting ~2 to 3 new card applications.
The Raven
Many employers (mine included) and especially retail look at a credit to income ratio. For example, in my company, if someone has credit card debt greater than $5,000 and a mortgage greater than, I believe $200,000, they are flagged and usually fail credit evaluation. One potential part-time employee was disqualified due to the high number of revolving balances; the company claimed that the income earned wouldn't be sufficient. Eventually, they overrode it, due to the fact that the spouse made well over $100,000 per year - enough to cover the debt. It's a backwards system...
My first job out of college in 1992 (during a nasty recession) was as a car salesman. I almost didn't get the job (and then of course, I was asked to quit after two months because I was so lousy at it). Anyway, during the interview, the guy asked me if I gambled or did cocaine. I said "of course not" ... which was true BTW. Then he shook his head a bit and siad that the people who have expensive habits like that often make really good salesmen because they really need money.
What changed under Obama? Nothing Good
I'm not a lawyer, let alone a labor lawyer, so take this with a grain of salt.
My understanding was that any time you add a hoop for applicants to jump through that doesn't have anything to do with the job, and if that hoop makes it harder for minority group members to apply, you're under the gun of the antidiscrimination laws.
You might want to look into how much money is lost to high-end, "good employee" types in major fraud cases, compared to petty thefts of the odd $10 from a cash register. You might be surprised by the results.
If you disagree, post your argument. (-1, Overrated) isn't your personal censorship tool for views you don't like.
Except in special cases, my financial information is no business of my employer. I would never give my credit report to a prospective employer, period, unless they're going to give me a loan or something. If they have a problem with that, they can keep on looking for another candidate. And your example is also interesting... so the person wanted a part-time job and they initially didn't want to give it to her because it wouldn't be enough to pay her debts? If enough employers implement systems like that, it will make sure that someone that is in debt will be in debt forever.
Nope... candidates for jobs just need to say "no" to this trend. I've never been faced with it myself, but if I ever am then I'll just keep looking for some other employer.
You raise a very good point here: Are the prospective employers getting your credit "score" or a fully detailed copy of your credit report? Also, does this employer have a policy statement which describes their use (and their future refreshing of this information along with future disposal) of this potentially valuable and error-prone information about you?
The credit check appears on the face to be more useful for corruption than almost any other employer mandated check they do (drug test, background check, etc actually have a measurable purpose: what's the credit check really provide feeding into the evaluation process--that is a fair question to ask).
Another thing I have had experience with: Ask the employer if they do this check themselves, or if they hire this function out to a third party. If it's a third party, ask who it is and find out their policies to ensure *they* will take care of your personal information. In general: I don't trust companies much, and third-party investigation firms even less (think "HP and the board" here).
Had an interview with a large corporation and they wanted me to basically sign over all my rights giving them carte-blanche to grab everything on me *before* the interview even took place. To my way of thinking this was very much over the top.
Lately I even refuse to give them my SSN until after some sort of interest has been shown on both our parts. Indeed: Almost every job offer these days is conditional on passing a drug screening/background check anyway. A credit check (if appropriate) belongs in this part of the job interview/acceptance cycle. Not before.
As for if it is appropriate: I feel that the credit check is much less useful than a background check (looking for felony convictions, for example).
In my third year of undergrad I moved into a new apartment and called the phone company to get a phone hooked up. I had had two previous (in good standing) accounts with the phone company. When they asked what my occupation was, I said student.
My sister, fresh out of high school, called to get her phone hooked up. No credit history at all, no dealings with that or any other phone company. She told them she was unemployed.
I had to pay a $250 security deposit. She didn't.
I check credit on my applicants. It is not make or break, but given two almost equal applicants it for me breaks ties. It is a historical judgement. If there are collections, no way, but large debts I generally ask the applicant to explain if I really want to hire him/her. Medical issues I throw out. Large medical bills are hard to pay for even higher income, but late payments, especially any collections, etc....their resume gets the trash or they are not hired in the tie breaking phase. I also check facebook and myspace, and do an extensive background check.
You can guess, but until there's a study, you're just guessing. It's not even an educated guess. My guess is that a) executives are more likely to embezzle from you than non-executives, and that b) executives have good credit ratings.
i'd hit it so hard, if you pulled me out you'd be the king of britain [bash.org]
Yes it's very well known that a simple credit check (ie someone doing a credit check on you), whether landlord, bank or employer, in fact removes several points from your credit.
In BC here, almost every landlord is askig for credit info these days to run credit checks, and the housing market is F*ked - so in order to find a house you may have to look at 5-10 (or many more) places before you actually get one. If every one of these landlords does a credit check, your 'oh so good' credit ends up suffering a ridiculous amount just because you are looking for a house to live in.
Keep the poor down - it's the way of the system.
Gekido's Lair
I wouldn't mind this so much as long as I can also run a credit check on the company and perhaps some of its officers. Too often companies go under and employees don't get paid. If I'm going to take a job, then I need to verify that the company can meet its financial obligations to pay me.
Avoid Missing Ball for High Score
During the second semester of my sophomore year in college my father had a stroke that hospitalized him for several weeks and which he needed years of physical therapy in order to perform basic tasks. Obviously he lost his job, disability was shit and my mother worked her ass off paying the doctor's bills (my father was a contract worker so no health insurance), utility bills, and mortgage. I went to an expensive private school that was paid partially through scholarships, grants and loans. With both parents working they were able to pay the remainder of my tuition out of pocket. Along comes the stroke and I no longer have any money to attend school, my mother needs my help and so with only 3 weeks left in the semester I'm granted a leave of absence and go help out my mother. My school is paid in six-month increments and after my father's stroke I have an $1800 balance owed which cannot be paid asa there is zero savings left. If I can't pay I can't finish those units and get credit for those classes, so I get a credit card and pay school off and finish up over the summer. Next semester comes along and its community college for me and a part-time job to pay off this credit card debt. I apply to Apple Computer as a retail associate. I had retail experience, Mac OS experience, as well as a letter of recommendation from a pervious employer as well as from the chair of my previous school's department. After the first interview I felt confident I'd get the job, after the second interview I was sure, but what came next surprised the crap out of me. One morning FedEx delivered a letter from Apple, I thought, "Awesome, I got the job!" but what I received instead was a letter stating that I was ineligible to work for Apple, as my credit report was "unsatisfactory". I called the 800 number listed in the letter to contest the claim but was only told that this was their policy for a person with my credit score. All this for a $12 an hour part-time position. What really made me sad was the fact that I love Appl's computers, I thought that they really did "think different" and all that but when that letter arrived my only thoughts were of their obvious elitism and what felt like class prejudice.
The opposite is also true if you have credit available but don't use any of it (i.e. carry zero balance) it hurts your score. It sounds silly but I've been told that by several Mortgage companies. Say you had a 10K credit card and you paid them off but never closed the accounts those zero balances look bad as it looks like that credit line is open to you which hurts your score.
It hurts your score because you show a large amount of credit that you COULD draw upon. What you can do to improve your score in that case, is contact the credit card companies and request that they reduce your credit limit on those cards. If you cancel the cards, sometimes all that good credit history gets erased from your file.
Try to hack my 31337 firewall!