Credit Inquiries for Employment

[leena]

I work in Corporate and am heavily involved with HR. Everyone needs to know that most companies do credit and background checks due to legal and insurance requirements. If one was an employer in today's world and one was running a business and needed employees to help with the business, would one just hire anyone off the street without checking their background and/or credit history before putting them in departments where they have access to all sorts of information, items, accounts or cash? Think about it...

HR folks were themselves an applicant. They are trained as to the process of hiring, the legalities involved and what is required by the company they work for. Usually, the hiring process is all done via a policy in place by the company and when resumes arrive, they are gleaned through to find the most qualified candidates for the position. The gleaned applications are then taken to the person in the company who is looking for the candidate and they are again reviewed and the most promising/qualified applicants are called in for interviews. From there it is all about how one sells themselves to get the position, their background and training, experience, qualifications, education, etc., etc. Either prior to the interview via the application or at the interview, you are asked to sign an employment application which will detail what they will do upon your signature and your providing them with your SS number. In that paragraph it will state if they will do a background and/or credit check. If you sign the application, you allow that process. If you don't sign they will not do the check and of course you will not be considered for the job. After the interview is done the checks are run to determine if all is in place as to the persons resume, references called, etc. A credit and/or background check will be run and will be reviewed. If the company has policies in place as to not hiring anyone with bad credit, bankrtupcy or felonies on their records, you may not be considered any further for the position. But if you have a stupendous resume and are what they are looking for as to experience and qualifications, they can and may find ways around that issue. They may question one further as to their financial history at that point if they are still interested and call one back for a second interview.

Note that during an interview the credit checks and background checks have probably not yet been run. That is done usually after the interview. If one has concerns about a bankruptcy or anything in their background that one feels couuld be an issue, when asked at the interview if one has any other questions that is the time to be honest and ASK if something like that could hurt in getting a position with the company and if one filed BK for good reason (i.e., job loss, major medical issues, etc.), being open about that and stating that your past financial history will not have any affect on your job performance if hired could help get you the position. Nothing, however, is guaranteed as to any position one is applying for so do as much homework as one can on a company's hiriing processes if one has an interview lined up.

Well, the article I posted the link to previously is actually challenging the common place assertion that most companies do credit checks now. I think it is a fear that is frankly overblown and have thought that since before we started seeing tidbits like that in the news.

If you go down into the comments section on the article from the link I posted, you will see another link leading to an article stating that the poll of employers that so many news articles sighted as evidence that credit checks were everywhere was pretty flawed, and that is NOT how the organization that did the polling interpreted the results.

The U.S. Department of Labor stat is that 45% of employers check credit, which is probably pretty accurate. Another interesting aspect of the situation is that many low paying positions, like cashiers are subjected to credit checks while some better paying positions are not. OR to make matters even more complex, the credit check is done but not used in the way you think it would be. I have an executive position now, which I have been at just a few months. I got the job just months after my BK 7 closed. For Executive and accounting positions ONLY, my company does credit checks. They do not do them for any other positions including Site Managers. I told them about the BK when I was informed they would be doing a credit check, and I assumed my chance at the job was done. I did not explain the BK in any way because I felt like all was lost AND it was none of their business. They told me the BK was not a problem, they were checking for outstanding, unpaid debts that might provide a temptation for people with access to cash (I have direct access to a great deal of money and a company credit card). I was shocked to get the job, and honestly would not have applied for it had a I understood they would be checking credit, or exactly how "Executive" the position was (which would have lead me to expect they would check credit). Obviously, I am glad I did. Ironically, my company has discontinued the practice for anyone not working in the accounting department since I was hired. The idea is even if a first tier exec like me were stealing, we would be caught by accounting in a big hurry AND our massive criminal and employment background checks are are a far better measure of that risk, anyway.

I think that there is not ONE answer about how companies are handling credit checks or the lack thereof, any more than there is ONE answer about how they are handling criminal checks. In my business, any kind of criminal history is death to any applicant. We will not hire someone with a three year old DWI, and that is pretty standard these days in my industry. Others are far more lenient about such issues, particularly non-felonies not involving drugs, sexual misconduct or violence.

As to the answer of how are companies handling all these resumes, well I can only tell you what I do, which is still pretty much to read all of them, pick the best qualified ones to interview, and go from there. I can only interview so many people so my "tiebreaker" tends to be who submitted their resume first. HR does not decide who we as Managers interview or filter our applications so our process may be different from some.

Bottom line, if you are applying at Flamingo's company your credit history may present serious issues, at others it will not or it will not be checked at all. I totally agree with being honest and upfront, BUT don't go babbling about your history or your BK until it is clearly a potential issue, such as you know they WILL run a credit check because you are asked to sign an authorization for same. Some companies, such as my previous one have you sign an authorization that approves all checks, credit and criminal BUT they are only running criminal. That is what my old employer did. Ask if in doubt before offering up your BK would be my advice.

Some wise person on this site said, worry about the things you CAN control in the job seeking process. Your BK is what it is and there is not much to do but get out there and work with it regardless of how many or how few employers are checking credit.

[Flamingo]

It is difficult to go by polls and quoted percentages...there are too many variations that would not apply to certain sections of the country or certain job positions plus there are those that have not participated in the poll or interviews to obtain the percentages.

As an aside, also note that some places are now fingerprinting and also giving out prior to an interview (to be brought back to an interview) a financial form to indicate all debts owing and the balance due. They then take that information and compare it to your credit reports (this has been done for quite some time by a major financial player in the industry). How do I know this? I am not just involved in corporate HR where I work but have many contacts at other corporations/businesses and their HR Depts. and most of them are not financial-related companies. There will be an increase as time goes along as to checking credit and background searches as companies have to comply more with legal requirements and insurance coverage. The main thing to remember is that this is all situational as to the company you are going to interview with and their policies in place. That is why I state above that the best thing one can do prior to even applying for a job at a company is to thoroughly research that company and its hiring practices as much as possible - most companies have website sections that are geared to applicants and HR. That way when you show up on the day of your interview, there will be no surprises.

One thing for sure, don't ever let a bankruptcy on your record prevent one from apply for a job. If you are qualified for the position and possess the skills and know how, your chances of getting that position may be better than you think.

[leena]

Considering that there is a proposed federal law to stop credit checks for the majority of jobs, and some information disputes the claim that more employers are actually doing credit checks, I would dispute the notion that this will become increasingly common. It IS increasing controversial and may well be put a stop to for most jobs, by law.

We agree on one thing, though. No one should let BK stop them for applying for a job.

As to the disclosure of debts prior to an interview to compare with your credit report, I think I join many others in saying that unless I were being interviewed for White House Accountant, even if I had a perfect credit rating I would turn down that interview, flat. It may be more frequent in the finance industry, but I think to most of us it would be totally unacceptable. What next? Details on all the items in my home and a report on why I bought them to prove "trustworthiness and financial responsibility"??

Also, this stuff is not being done at the behest of the insurance industry-many industry reps have already weighed in on that misconception. It is snooping, plain and simple.

[queenfluff]

I work in Corporate and am heavily involved with HR. Everyone needs to know that most companies do credit and background checks due to legal and insurance requirements. If one was an employer in today's world and one was running a business and needed employees to help with the business, would one just hire anyone off the street without checking their background and/or credit history before putting them in departments where they have access to all sorts of information, items, accounts or cash? Think about it...

HR folks were themselves an applicant. They are trained as to the process of hiring, the legalities involved and what is required by the company they work for. Usually, the hiring process is all done via a policy in place by the company and when resumes arrive, they are gleaned through to find the most qualified candidates for the position. The gleaned applications are then taken to the person in the company who is looking for the candidate and they are again reviewed and the most promising/qualified applicants are called in for interviews. From there it is all about how one sells themselves to get the position, their background and training, experience, qualifications, education, etc., etc. Either prior to the interview via the application or at the interview, you are asked to sign an employment application which will detail what they will do upon your signature and your providing them with your SS number. In that paragraph it will state if they will do a background and/or credit check. If you sign the application, you allow that process. If you don't sign they will not do the check and of course you will not be considered for the job. After the interview is done the checks are run to determine if all is in place as to the persons resume, references called, etc. A credit and/or background check will be run and will be reviewed. If the company has policies in place as to not hiring anyone with bad credit, bankrtupcy or felonies on their records, you may not be considered any further for the position. But if you have a stupendous resume and are what they are looking for as to experience and qualifications, they can and may find ways around that issue. They may question one further as to their financial history at that point if they are still interested and call one back for a second interview.

Note that during an interview the credit checks and background checks have probably not yet been run. That is done usually after the interview. If one has concerns about a bankruptcy or anything in their background that one feels couuld be an issue, when asked at the interview if one has any other questions that is the time to be honest and ASK if something like that could hurt in getting a position with the company and if one filed BK for good reason (i.e., job loss, major medical issues, etc.), being open about that and stating that your past financial history will not have any affect on your job performance if hired could help get you the position. Nothing, however, is guaranteed as to any position one is applying for so do as much homework as one can on a company's hiriing processes if one has an interview lined up.

Thanks Flamingo.

So, are you saying that employers DO NOT do not credit credits before they call people for an interview? That is what I thought was going on with the economy - employers don't even want to bother with employees that are BK or have bad credit. But from what you are saying, it sounds like they can't (or are not supposed to) do a credit check until after they have already interviewed you?

Is this the norm? Or can/will employers run credit checks on people that send in resumes or applications that they are considering call for interviews to see whether they want to bother to interview you or not?

I am just trying to figure out if my getting calls for interviews if being torched because they are checking my credit before even considering call me. And than they see the BK and don't call me because of that.

[queenfluff]

As to the answer of how are companies handling all these resumes, well I can only tell you what I do, which is still pretty much to read all of them, pick the best qualified ones to interview, and go from there. I can only interview so many people so my "tiebreaker" tends to be who submitted their resume first. HR does not decide who we as Managers interview or filter our applications so our process may be different from some.

.

Sorry I did not see your response right away. So, it sounds like the sooner I apply when I see a job posted the better because some one may actually make a decision based on who applied first? No offense but I hope interviewers go on more than that to decide a tie breaker. I would think between the two interviewees that at least one would have made a slightly better impression than the other and thereby make it an easy tie breaking decision. I would hope I would not lose out on a job because I applied two minutes later than the person I am competeing with.

[jyoung21]

So my husband just applied for a job and is finished with the interview process. They asked him to sign a consent for a background check but did not specify a credit check. Can they include a credit check even though they did not specify?

[leena]

General "background checks" may or may not include credit checks-it is all in the fine print. Making it even more complex as I said before it sometimes happens that you sign an authorization for credit and criminal and they only do criminal, like my last employer. Odd but true.

Queenfluff, unless you have signed a background check authorization, they can't do one prior to the interview. An authorization for criminal and/or credit is a part of some employment applications. If you just submit a resume prior to the interview, they cannot run checks beforehand.

I wish there were a better way then sometimes having to go with what resumes came in first in choosing who to even interview. However, particularly for jobs like receptionist there often just is not. Most everyone who sent in resumes is over qualified for the job. I am going to meet with as many of them as possible (I am thinking ten people) and go from there.

[queenfluff]

General "background checks" may or may not include credit checks-it is all in the fine print. Making it even more complex as I said before it sometimes happens that you sign an authorization for credit and criminal and they only do criminal, like my last employer. Odd but true.

Queenfluff, unless you have signed a background check authorization, they can't do one prior to the interview. An authorization for criminal and/or credit is a part of some employment applications. If you just submit a resume prior to the interview, they cannot run checks beforehand.

I wish there were a better way then sometimes having to go with what resumes came in first in choosing who to even interview. However, particularly for jobs like receptionist there often just is not. Most everyone who sent in resumes is over qualified for the job. I am going to meet with as many of them as possible (I am thinking ten people) and go from there.

Thanks Keena. So should I just assume that employers are not running credit checks on me for jobs I have applied for but no interview yet?

I misread your post before. I thought you were saying that to decide who gets the job (meaning after interviewing) when you can't decide between two people, you go with who applied first. I thought that was sort of odd but I misread.

[Flamingo]

Thanks Flamingo.

So, are you saying that employers DO NOT do not credit credits before they call people for an interview? That is what I thought was going on with the economy - employers don't even want to bother with employees that are BK or have bad credit. But from what you are saying, it sounds like they can't (or are not supposed to) do a credit check until after they have already interviewed you?

Is this the norm? Or can/will employers run credit checks on people that send in resumes or applications that they are considering call for interviews to see whether they want to bother to interview you or not?

I am just trying to figure out if my getting calls for interviews if being torched because they are checking my credit before even considering call me. And than they see the BK and don't call me because of that.

The only way a prospective employer can run a credit or background check on you is if you authorize it. When you sign an employment application, usually somewhere on the application (usually the paragraph just preceding your signature), it is indicated that upon signing the application you allow the prospective employer to run whatever checks are listed in that paragraph. So once you provide your SS# on the application and sign, they can run whatever check you agreed to upon signing.

[Flamingo]

Considering that there is a proposed federal law to stop credit checks for the majority of jobs, and some information disputes the claim that more employers are actually doing credit checks, I would dispute the notion that this will become increasingly common. It IS increasing controversial and may well be put a stop to for most jobs, by law.

We agree on one thing, though. No one should let BK stop them for applying for a job.

As to the disclosure of debts prior to an interview to compare with your credit report, I think I join many others in saying that unless I were being interviewed for White House Accountant, even if I had a perfect credit rating I would turn down that interview, flat. It may be more frequent in the finance industry, but I think to most of us it would be totally unacceptable. What next? Details on all the items in my home and a report on why I bought them to prove "trustworthiness and financial responsibility"??

Also, this stuff is not being done at the behest of the insurance industry-many industry reps have already weighed in on that misconception. It is snooping, plain and simple.

Many of the big financial players for years have fingerprinted prospective employees and provided them prior to an interview with an application and also with that application a separate form to list all their debts, monthly payments, etc. I had to go through it myself working contract on a job in the late 90's, that is how long the practice has been in place. It would be one's own personal choice after inquiring about the position whether or not they wanted to proceed from there and apply because it is obvious they are going to be put through the identity and credit wringer for the position.

Eliminating credit checks would not eliminate background checks which would include finding bankruptcies or judgments on public records if the prospective employer wanted that information. If employers want to get around it, they can. As identity theft, employee fraud and theft and other practices increase in our society, employers will be hard pressed to ensure they are protected along with their clients and employees. It's hard to make the picture pretty in any way as those that abuse the system make it hard for those who don't. Again, it all comes down to the employer and the position.

[queenfluff]

The only way a prospective employer can run a credit or background check on you is if you authorize it. When you sign an employment application, usually somewhere on the application (usually the paragraph just preceding your signature), it is indicated that upon signing the application you allow the prospective employer to run whatever checks are listed in that paragraph. So once you provide your SS# on the application and sign, they can run whatever check you agreed to upon signing.

Thanks Flamingo!

Ok, so I can assume that employers are not running credit checks on me before calling me for an interview (sounds like they aren't able to and aren't not supposed to - would they even be able to do that somehow? ) and that my BK is not preventing me from getting interviews but it may only be an issue after I have interviewed with an employer?

That is a relief than. I would rather know that my not getting interviews is probably because of the economy and not because employers are finding out about my BK when I apply somehow.

[Flamingo]

Thanks Flamingo!

Ok, so I can assume that employers are not running credit checks on me before calling me for an interview (sounds like they aren't able to and aren't not supposed to - would they even be able to do that somehow? ) and that my BK is not preventing me from getting interviews but it may only be an issue after I have interviewed with an employer?

That is a relief than. I would rather know that my not getting interviews is probably because of the economy and not because employers are finding out about my BK when I apply somehow.

They can if they want to if they receive from you a signed employment application listing your SS# and in that application you indicate you authorize them to do so as I indicated above. Usually what many employers do is have the interview first and then run any checks after the interview on those they are interested in to help them make a decision. It would be expensive for them to run credit/background checks on all applications received for a position.

It's hard to say why anyone would not be getting interviews in this economy - the biggest reason is that there are probably a huge number of applicants for one position since so many people are looking for work. I can tell you though something that will help you on your resume and that is going to school to extend or advance whatever you do in your career to take it one step beyond. Employers love that and it will give you an edge over all those other applicants.

[queenfluff]

They can if they want to if they receive from you a signed employment application listing your SS# and in that application you indicate you authorize them to do so as I indicated above. Usually what many employers do is have the interview first and then run any checks after the interview on those they are interested in to help them make a decision. It would be expensive for them to run credit/background checks on all applications received for a position.

It's hard to say why anyone would not be getting interviews in this economy - the biggest reason is that there are probably a huge number of applicants for one position since so many people are looking for work. I can tell you though something that will help you on your resume and that is going to school to extend or advance whatever you do in your career to take it one step beyond. Employers love that and it will give you an edge over all those other applicants.

Thanks Flamingo.
Good to know. Companies will not waste time or money (although I thought there were all those free sites for credit checks now) doing credit check on potential interviewees - only after they are interviewed. I haven't had any jobs I have applied for that asked me to fill out a background/credit check app when I applied. These are professional jobs that I send in resumes for.

Actually I would LOVE to go back to school right now (esp. to keep myself busy because being unemployed can drive one crazy! ) but I have zip money for it and after going through BK I honestly do not want to take out a loan. If I can get a grant or anything I don't have to pay back than that would be the only way I would do it. Until I get a job, I don't want myself to be in any more debt for a while. I don't want to take the chance of running up loan debt who knows when the economy will get better and I will be able to get a job? What if I can't start paying on it? The thought horrifies me.

I have plenty of school on my resume. Right now I would like to go back but for something different than I was doing in the past so I don't know how that would look to employers because the job I have to apply for right now, the one I am most qualified for, are in different fields.

I plan on looking into getting a grant or something. It would be graduate school though which is so expensive. I have a half finished masters which I don't want to finish because it is in another field (I didn't finish it because I got laid off the company that was paying for it and I couldn't afford to keep paying tuition myself).

[leena]

Many of the big financial players for years have fingerprinted prospective employees and provided them prior to an interview with an application and also with that application a separate form to list all their debts, monthly payments, etc. I had to go through it myself working contract on a job in the late 90's, that is how long the practice has been in place. It would be one's own personal choice after inquiring about the position whether or not they wanted to proceed from there and apply because it is obvious they are going to be put through the identity and credit wringer for the position.

Eliminating credit checks would not eliminate background checks which would include finding bankruptcies or judgments on public records if the prospective employer wanted that information. If employers want to get around it, they can. As identity theft, employee fraud and theft and other practices increase in our society, employers will be hard pressed to ensure they are protected along with their clients and employees. It's hard to make the picture pretty in any way as those that abuse the system make it hard for those who don't. Again, it all comes down to the employer and the position.

Bankruptcy and judgments appear on credit checks, not criminal histories and they may be public records, but considering that federal law already prohibits BK discrimination and the credit-check laws passed in Oragon, HI and Illinois now effectively ban the use of credit, of which judgements are a part of, in most positions employers would be beyond stupid to try to get that sort of information and then use it against prospective hires. Hard to prove for the person who is denied the job? Yes. However, the one person who DOES prove it will own your company by the time they lawsuit is done. Maybe it is my property managerment background, but my employers and my coworkers have been exceedingly cautious for as long as I have worked in the field about what was and was not used in hiring decisions and in who to rent units to as well. If it even tastes of the APPEARANCE of impropriety, it simply is not done. That may be why credit checks have never been commonplace in my industry for most employees, in spite of a few "experts" in recent years saying they should be conducted.

My company stopped running credit checks on all but accounting employees because of talk that credit checks could be discriminatory, among other issues. They felt that outweighed any potential benefits and from a cold practical view, not just my own situation I tend to agree - and that is with no ban on credit checks in MN.

[Positive9]

You're correct. Thank you for sharing because this helps me and give me hopes!