Employment Credit Checks-Common Myths

[leena]

I have been poking around here and I am seeing there is a common misconception that "most" employers check your credit prior to hiring you.

This is not the case. The vast majority of employers do a *criminal* check prior to hiring you. Roughly 30% of employers run a credit check. This is most common in banking, retail, security positions,any position involving a security clearance, and any "high finance" position. If you are being inviewed for VP of the company, they may well run a credit check. Credit checks are also more common for employment in some parts of the country.

They must inform you if a credit report is going to be pulled on you, and if any information on a credit report is used in deciding not to hire you, you must be informed of that also.

It is illegal not to hire people solely because they filed for BK, but some positions in the financial fields are exempt from that. Also of course they can always find another reason they did not hire you.

It is true that any employer can run a credit check if they inform you first and have your consent, but once again, roughly 3 in 10 actually do according to an HR seminar I recently attended. The bad economy and high unemployment may have slightly increased this number, but with so many people in foreclosure and BK, the stigma on these things may actually be less and not more with some employers.

Bottom line, it looks worse actually to have a bunch of unpaid debts and judgements you have not filed on than to file and be picking up the pieces.

[hereforinfo]

Most employment applications have you sign for permission to do a background and credit check, but it seems that most of them don't actually do the credit check. I think it's just a catch all clause they put on there to cover their bases.

[backtoschool]

Working on Wall Street, I had to have extensive background checks, and got the job(s) even with bad credit (defaulted student loans at the time)

Here is a link to a post I posted some time ago about how a background check is done.

http://www.bkforum.com/showthread.php?t=43658

[Flamingo]

I work in Corporate, including dealing with HR issues amonst other matters, and most of what you have stated in your posting has been discussed on here extensively. When you sign an employment application, somewhere on that application (usually in the paragraph just above your signature) you agree to what they can check on as to you...you also provide your SS Number for that purpose. It will include a criminal background check, a credit check, or both. You may also sign agreeing to have a physical done prior to employment or to have drug testing done. You probably will not know ahead of time whether or not a company will run a credit check on you when you apply until you actually have the application in hand from the prospective employer. Many companies now have employment sections on their websites where that information may also be listed for prospective employees.

You can tell if a credit check was run on you by viewing your credit repoits, although it may not show up on all three, maybe just one. There is no guarantee a credit check may not be run so if one signs an application agreeing to one, expect one to take place. Many employers today are very careful whom they hire and extensively check them out.

[leena]

Oh, I understand you will not know for sure when you apply if a credit check will be run, but generally by the time you are in the interview process you do know. I have no doubt that companies are doing extensive background checks. In my field, even a 10 year old DWI can disqualify you from employment but credit checks are not the norm.

I think that Fortune 500 employers, the big corporations have always done more credit checks, bad economy or not. Then again, these are the same types of employers who will go out to the parking lot and check to see if your car looks good during the interview-who needs them?!

[Flamingo]

The best thing for any prospective employee applying for any job in today's world is to expect a credit check and background check no matter what the position. Certain things on either can prevent one from getting a job. Be prepared and also be prepared in some fields to pass a physical and drug testing and on the job random drug testing. There is a lot of competition out there now for the good paying positions in the working world no matter what the position. The more one educates themselves about a company, business and their hiriing practices if applying there for a position, the better your chances of getting your foot in the door.

[leena]

The best thing for any prospective employee applying for any job in today's world is to expect a credit check and background check no matter what the position. Certain things on either can prevent one from getting a job. Be prepared and also be prepared in some fields to pass a physical and drug testing and on the job random drug testing. There is a lot of competition out there now for the good paying positions in the working world no matter what the position. The more one educates themselves about a company, business and their hiriing practices if applying there for a position, the better your chances of getting your foot in the door.

So, for a person who has filed BK this would mean to be prepaired to discuss your BK. Frankly though, if you are applying to a company that weighs credit checks heavily, that is often going to mean that you are out of the running, even though it is illegal to discriminate (in most fields) against an applicant for filing BK.

I say know what is common in your field and come prepaired to discuss whatever is asked of you regarding your background.

My whole point in posting is that a lot of people filing BK (and a lot of people in general) are downright anxiety ridden about the prospect of employer credit checks. Most of the time, it is a needless worry because it is still the case that far fewer employers check credit than criminal history and you will have an opportunity to find out if they are checking it at some point in the hiring process and deal with it from there.

Unless you are a CPA or in some other field where credit is an end-all-be-all, and you plan to remain in that field, you probably do not have to worry about being unemployable due to a BK.

[Flamingo]

It is estimated that half of all employers now do credit checks and that is a substantial amount, rising from about 35% or so in 2004...and you can bet the percentage will go even higher...

http://abcnews.go.com/Business/story?id=7919922&page=1

It is not new news that filing BK or having bad credit can prevent one from getting a job, especially in today's world where everything about you can be checked or obtained. Of course its a scarey thought to deal with along with the anxiety of having to file BK but no one ever said filing BK was easy with some of the things that go along with it. Each prospective employee for any company will need to be prepared to meet a lot of non-BK filing competition head on with a BK on their records and educating themselves about the process and the company is the best way to hopefully get a foot in the door, and also being honest about one's situation.

[leena]

Actually, I think once the economy improves and employers have fewer people to choose from when hiring, the percentage is likely to get lower of employers doing credit checks. It is a "weeder" tool and a controversial one at that. Some states are already looking to further regulate how prospective employers can ask for and use credit checks.

We really have no argument here, because as I said it is all good and well to be prepaired for anything and everything when you look for a job. I agree the more information you have the better off you are.

[nc73]

Guess I'm F***. It will be hard enough as it is to find work.

[leena]

I might also add that in July of this year, the "Employment for All" bill began its travels in congress-this bill would prevent credit checks from being used in hiring decisions except in selected occupations. Of course, it may well die in committee (most bills do). The current government estimate is that roughly 43% of employers use credit checks in making hiring decisions.

I would not currently state things in terms of of "having to compete with non BK filing applicants". As I said I think a BK filing applicant might actually be better off than someone who still owes lots of unpaid debt when it coems to hiring decisions.

I am glad that credit checks are not common place in the rental property management field (though not unheard of).Also, I am not seeking employment now and do not expect to be for a few years. I feel for BK filers who work in occupations where they are more common.

[leena]

Guess I'm F***. It will be hard enough as it is to find work.

I really don't think your f***. Chances are you will be just fine. If you do get asked about your BK or credit in general, just be prepaired to speak honestly about it. Believe me, though plenty of companies could not care less about your credit if you have good qualifications, work history, ect.

I hire people in my current position. The only person my company ever ran a credit check on was the lead accountant.

[adviceplease]

I hope hospitals do not check, I will be pretty disappointed if I go to school for 3 years and then can't get a job because of my BK.

[leena]

I hope hospitals do not check, I will be pretty disappointed if I go to school for 3 years and then can't get a job because of my BK.

Medical professional are in high demand now, bad economy or not. Half my family has worked in the medical field with good, bad, and so so credit. I am sure you will be just fine.

[Flamingo]

I might also add that in July of this year, the "Employment for All" bill began its travels in congress-this bill would prevent credit checks from being used in hiring decisions except in selected occupations. Of course, it may well die in committee (most bills do). The current government estimate is that roughly 43% of employers use credit checks in making hiring decisions.

I would not currently state things in terms of of "having to compete with non BK filing applicants". As I said I think a BK filing applicant might actually be better off than someone who still owes lots of unpaid debt when it coems to hiring decisions.

I am glad that credit checks are not common place in the rental property management field (though not unheard of).Also, I am not seeking employment now and do not expect to be for a few years. I feel for BK filers who work in occupations where they are more common.

I've been right in the action where you have someone with bad credit/BK on their records and compared to someone else with a similar background and skills and it will come down to the person with the clean record. I'm not saying that is done all the time; however, it is done a lot and the applicant not getting the job gets the letter that it was a hard decision to make but someone else got the job. The entire scenario of credit checks and credit profiling is difficult to swallow but is done by employers to protect themselves and their other employees/business from embezzlement, theft and fraud. Unfortunately, the stigma of bankruptcy affects anyone who has filed and it is the result of those bad eggs that have filed being hired and embezzling, stealing checks, opening fraudulent accounts, stealing cash, etc., etc. and it makes it hard for all the good folks with good employment backgrounds to get that foot in the door. Hopefully someday the selection process will eliminate a lot of the stigma from those that truly should get the job.

As long as there is a BK on one's record, one needs to be on their toes to have a bright, shining credit record after discharge (no late or nonpayments on anything), go back to school if needed to add or change skills, and keep resumes updated. Getting a job is selling yourself to the employer and how you will be a benefit to the company and help make them money. One should not let a BK deter them from applying for a job; be prepared to explain you had a bad life event, you have recovered or are recovering, and could do a hell of a job for their company if hired...