Employment Credit Checks-Common Myths

[leena]

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...

I never said that some companies did not do it, they most certinally do-and many companies have done it for a long time (not really a recent thing, there is just more going on with credit checks now than in the past). I might add that some companies would feel more comfortable with someone who filed BK then who had current outstanding debt.
Personally, I would think twice before going through on an application with a company that checks credit for employment-and I felt that way when my credit was great for a whole bunch of reasons that have no place on this forum.
Just my opinion, and YMMV and all of that. My basic message remains the same, don't be discouraged from applying for a job because of your BK, and don't even assume it is going to make the job search process significantly more difficult for you, it may or may not depending on a lot of variables.

[Ifonly]

Flamingo is dead on with her posts on this one. I haven't given up looking for jobs in my field (I couldn't anyway, I make VERY sure I have more than the minimum contacts unemployment requires) but I know that my credit pushes me out the running. I'm a CPA and my specialty and prior experience is operational accounting, NOT tax filing. Meaning I'm the person you hire when you want to save thousands of dollars wasted on inefficiencies, insurance, etc. This also means I have complete control over the company's finances. I fully understand that it may not be fair, but the stigma of bankruptcy wipes me out. Saying that in this market employers will be more forgiving is simply not true. I have found the opposite - it's a "buyers market", so to speak. There are so many people out of work, the employers feel they can pick and choose at will. I've even seen ads that express, "do not apply if you have gaps in employment or any long periods of unemployment". So much for working mothers, eh? That would be most of my gaps (previous year being the glaring exception). I've even seen ads for a receptionist stating that you must pass a criminal and credit check with flying colors. Criminal, no problem - I don't even have a parking ticket. It is what it is. I've been trying to get part time work doing well, almost anything. Hostess or bussing tables, dog walking, entry level bookkeeping, no luck. The jobs are barely out there to begin with.

[backtoschool]

Flamingo is dead on with her posts on this one. I haven't given up looking for jobs in my field (I couldn't anyway, I make VERY sure I have more than the minimum contacts unemployment requires) but I know that my credit pushes me out the running. I'm a CPA and my specialty and prior experience is operational accounting, NOT tax filing. Meaning I'm the person you hire when you want to save thousands of dollars wasted on inefficiencies, insurance, etc. This also means I have complete control over the company's finances. I fully understand that it may not be fair, but the stigma of bankruptcy wipes me out. Saying that in this market employers will be more forgiving is simply not true. I have found the opposite - it's a "buyers market", so to speak. There are so many people out of work, the employers feel they can pick and choose at will. I've even seen ads that express, "do not apply if you have gaps in employment or any long periods of unemployment". So much for working mothers, eh? That would be most of my gaps (previous year being the glaring exception). I've even seen ads for a receptionist stating that you must pass a criminal and credit check with flying colors. Criminal, no problem - I don't even have a parking ticket. It is what it is. I've been trying to get part time work doing well, almost anything. Hostess or bussing tables, dog walking, entry level bookkeeping, no luck. The jobs are barely out there to begin with.

Any jobs working with money or government bids will be more sensitive to a bankruptcy. I definitely think a CPA would be a position affected by a bankruptcy.

But jobs in marketing, technology, public service, teaching, health care, general management, etc... will most likely not be affected.

Also, a lot of credit checks in a background check are simply ID checks to verify your identity as per the Patriot Act. For more on this, see my post earlier in the thread, which references a post I made in another thread awhile back about my own extensive background check.

[leena]

Flamingo is dead on with her posts on this one. I haven't given up looking for jobs in my field (I couldn't anyway, I make VERY sure I have more than the minimum contacts unemployment requires) but I know that my credit pushes me out the running. I'm a CPA and my specialty and prior experience is operational accounting, NOT tax filing. Meaning I'm the person you hire when you want to save thousands of dollars wasted on inefficiencies, insurance, etc. This also means I have complete control over the company's finances. I fully understand that it may not be fair, but the stigma of bankruptcy wipes me out. Saying that in this market employers will be more forgiving is simply not true. I have found the opposite - it's a "buyers market", so to speak. There are so many people out of work, the employers feel they can pick and choose at will. I've even seen ads that express, "do not apply if you have gaps in employment or any long periods of unemployment". So much for working mothers, eh? That would be most of my gaps (previous year being the glaring exception). I've even seen ads for a receptionist stating that you must pass a criminal and credit check with flying colors. Criminal, no problem - I don't even have a parking ticket. It is what it is. I've been trying to get part time work doing well, almost anything. Hostess or bussing tables, dog walking, entry level bookkeeping, no luck. The jobs are barely out there to begin with.

No one ever disputed that a CPA was in a hellava spot applying for positions with even a poor credit rating, let alone a BK. I am truly sorry for your situation, and I hope you can find a resolution.

I also did not say that employers were currenly more forgiving about bad credit. First of all, the ones that are checking credit find it very important indeed. However, when the dust settles on this mess in a year or two and we have this flood of people with BK's and forclosures, that may change. First because it will be so common place and second because the economy will pick up.

As I said, I am truly sorry for your situation. Anything is finance is likely to be forever tied to your credit rating, even if a miracle happens and the bill comes up for a vote and passes that would bar most employers from checking credit.

Where there is a will there is a way, though. A friend of mine in a similiar situation (CPA) who had to declare BK got her teaching license and is teaching math to high school kids. Unlike the guy in that article Flamingo posted, though about employers and BK, she was applying at the high school level and oh, yea she paid her *student loans*! Gee, I wonder why a collage would turn down a guy who was not paying his syudent loans?! <insert sarcastic smirk here!>

[Ifonly]

I am considering getting my emergency teaching certificate (I already have my clearances, fingerprints, etc. since I taught preschool for a few months last year) and then getting on the substitute list. Maybe I'll utilize that Pell Grant I qualify for to get my teaching degree. I'm a little hesitant to take that leap right now as I already feel as if my two college degrees that I have are worth oh, so much toilet paper. We'll see.

[Smokinjbc]

Hello-

I'm curious regarding background checks for the federal government jobs I'm converting to a 7 soon and have some IRS debt. Does anyone know how that will affect my chances (I'm in the management/human resources field)? I know I have to declare the IRS debt and explain how I am resolving it on the declaration for Federal employment for many jobs.

[Flamingo]

I also did not say that employers were currenly more forgiving about bad credit. First of all, the ones that are checking credit find it very important indeed. However, when the dust settles on this mess in a year or two and we have this flood of people with BK's and forclosures, that may change. First because it will be so common place and second because the economy will pick up.

There is no magic bullet or magic wand as to BK and emmployment. I admire your positive thinking and trying to make a situation better than it is but you need to realize that some things just don't change because certain things happen to more people; in fact, credit and background checks will probably eventually be the norm for every position as employers face increases in costs for liability insurance and comply with legal advice as to hiring practices to protect their businesses from fraud and theft. I just recently attended a large meeting/seminar on this and similar subjects. This will ever be more increasing in the health care field as this field is being flooded with applicants and hospitals and care facilities can afford to be extremely careful who they hire in the better paying positions. Competition will be extreme.

Hopefully, you won't encounter any of this as you make your way through the years following your BK until it is off your records. But during that time, just realize that it is there and it can create a problem for you anywhere in the employment world and credit world when you least expect it. BK is not just something you do and then sweep under the rug...it can have bad effects for years to come as many eventually find out.

Your positive thinking is a big plus for you so use that to your advantage when/if you apply for any future positions and any edge to stand over and above the competition is a plus.

[Flamingo]

Hello-

I'm curious regarding background checks for the federal government jobs I'm converting to a 7 soon and have some IRS debt. Does anyone know how that will affect my chances (I'm in the management/human resources field)? I know I have to declare the IRS debt and explain how I am resolving it on the declaration for Federal employment for many jobs.

One is thoroughly checked for any state or federal position. Whether or not your BK would present an issue as to your position remains to be seen but I would not let that be a deterrant in applying and I would go for the position if that is what you want to do. I would try to obtain some information on the hiring practices of where ever you are applying before hand and be fully prepared to honestly answer any questions that may be posted to you during any interview or on any employment application. Some actually ask the question right on the application if you have ever filed bankruptcy.

[momisery]

I am in banking, and I guess if they find out I will not be in banking anymore. But, from the inside I can tell you that I work for one of the top banks, and we are and have been very conservative. Today we were sent a letter talking about a bunch of banks that are in horrible trouble still in IL and FL. Banks are still going down, businesses are still closing, and retail is struggleing. Wall Street seems find with the mess the job market is in without realizing that eventually it will effect them too. We will not have any tax dollars to bail them out. Healthcare will also receive a handful of clarity on the situtation as more and more are losing their coverage and can not pay them a dime. So, should we not be working for businesses that can not contol their own books but must borrow from us or go under and then judge us for going BK because we don't have anyone to bail us out?

[My4mgirls]

Does anyone know how BK affects potential employment with a law enforcement agency??? I just had an interview today with the department of corrections in another state. I was told by someone that they were automatically disqualified for a job with DOC due to filing BK. Anyone have any words of wisdom???

[Pizza]

I'll just add this to the reasons NOT to be worried about credit (I've been through it before)... my wife was not checked at all when she was hired and I have held two jobs this year in which they both assured me they did not care about my credit in the least, and actually that most applicants are experiencing financial turmoil in this economy. So don't sweat it for every job you seek; your nervousness will show during your interview (possibly for nothing).

Instead of worrying about personal finance trouble in this kind of economy, it's probably best to focus on getting through the common 90-day 'probationary period.' What I've noticed through experience and research is that "you're hired" really means "we'll work you until the 90-day mark starts creeping up then find any reason to replace you" in this economy because companies can't afford to keep workers or give them pay raises and benefits. THAT is a far greater concern than your credit. Consider every job temporary regardless of how impressed your potential employer seems, and do everything you can to keep yourself covered.

There are exceptions of course, and unfortunately for My4mgirls, law enforcement is one position that greatly scrutinizes over credit problems (because they fear you'll accept bribes). Positions which give you access to money or a company's financial affairs are also included.

[leena]

I think you are essentially on the right track here Pizza. 45% of employers are checking credit, and they are using it in ways that differ greatly, not just in a "you have bad credit, forget it" way. Also, contrary to what Flamingo says above, there is no indication that the practice of checking credit is going to become more common. On the contrary, it is very controversial and there is proposed legislation to stop the practice in most types of employment as we speak. I also have to add that the demand for health care workers is growing even in this economy and will no doubt continue to do so, the idea that credit checks are going to become anything like common in this field is highly, highly unlikely (and I can almost promise the various professional associations for nurses, etc would practically riot if there were an attempt to make them common!).

As to the the DOC position, yes law enforcement has always loved credit checks. Not sure if BK will be an auto disqualify, but I do beleive they are one of the areas that are legally permitted to make it a disqualifying factor.

Last but not least Flamingo, who on earth thinks that BK is something you can "sweep under the rug"??? Chapter 7 stays on your record for 10 years! Chapter 13 stays for 7 years! It seems that you are determind to make us all iunderstand that we will be followed around forever by BK, greatly impaired in seeking employment, and pay for hideous financial crimes for years and years to come. Not sure why, because that is just NOT the truth of the job market, at least in my industry. Which, by the way is very crime sensitive and does not at ALL associate having filed BK with being a thief or bad credit with being a thief.

Every effort I have made to insert some perspective here on the whole credit check issue has been met by you with dire warning about how we are damned forever in employment by filing BK. A little guilt over the issue of having filed on your part, perhaps? Not sure, but I have said my peace on this issue.

[Flamingo]

Last but not least Flamingo, who on earth thinks that BK is something you can (sic) "sweep under the rug"??? Chapter 7 stays on your record for 10 years! Chapter 13 stays for 7 years! It seems that you are determind to make us all iunderstand that we will be followed around forever by BK, greatly impaired in seeking employment, and pay for hideous financial crimes for years and years to come. Not sure why, because that is just NOT the truth of the job market, at least in my industry. Which, by the way is very crime sensitive and does not at ALL associate having filed BK with being a thief or bad credit with being a thief.

Every effort I have made to insert some perspective here on the whole credit check issue has been met by you with dire warning about how we are damned forever in employment by filing BK. A little guilt over the issue of having filed on your part, perhaps? Not sure, but I have said my peace on this issue.

In my last posting on here I advised the poster not to let a BK deter one from applying for a position. No one is damned forever by BK but during the several years following discharge it can pop up and hurt when least expected. And it does not go away really ever...there are employment and other applications that ask if you have "ever" filed bankruptcy and you have to state "yes." Will that hurt an applicant? Possibly... Reality is a situation no one likes and while discharge brings the end of the debt issue, a whole other situation can arise afterwards due to the stigma of BK. I have worked closely with HR departments in many situations and the picture sometimes is not as rosey as one thinks when it comes to credit checks but in the long run, if one is looking for a job, apply and don't let the BK be a deterrant...if it comes up be honest. Expect a credit check to be run especially if it is mentioned during your interview or if on your job application. Be proactive and be prepared. Competition for jobs in many sectors is stiff. And that BK on one's records could be the deciding issue.

I don't know where you got that I state "that we will be followed around forever by BK, greatly impaired in seeking employment, and pay for hideous financial crimes for years and years to come." No one that files BK commits a crime unless that is how you feel about it. But just cause in one sector (i.e., as you state in yours) there are no credit checks being run, that is only one small segment of an entire job market. Putting blinders on a race horse only keeps him from seeing the horse next to him. There are many other horses in the race.

I am just being open and realistic about the job market so folks will think they are not immune to what is done out there. I am sorry reality makes you feel bad but that was not my purpose. Also, I have never felt guilty about filing Chapter 13...I've run into the good and bad of filing and have been denied credit due to BK and thankfully kept the same job during all this time and not have to have dealt with confronting BK in a job interview; but my husband has and lost his government security clearance over our BK and was questioned about it during a job interview. Best motto ever - "be prepared."

[bulletproof77]

Does anyone know how BK affects potential employment with a law enforcement agency??? I just had an interview today with the department of corrections in another state. I was told by someone that they were automatically disqualified for a job with DOC due to filing BK. Anyone have any words of wisdom???

I work for the state of California in law enforcement and have a recent Chapter 7. Although I was employed for many years prior to my BK AND foreclosure, I have sat in on many oral boards for applicants. Just be truthful, that's all they are really looking for. A BK should not automatically disqualify you, any deception during the interview process will. I know tons of cops that have had BK's, seems to go with the "ex-spouse thing".....Theft, most convictions (unless expunged/pardoned) bad driving record, recent drug use are all major no no's..But a BK should not be an automatic disqualifying offense, at least in my state. Good luck !

[leena]

In my last posting on here I advised the poster not to let a BK deter one from applying for a position. No one is damned forever by BK but during the several years following discharge it can pop up and hurt when least expected. And it does not go away really ever...there are employment and other applications that ask if you have "ever" filed bankruptcy and you have to state "yes." Will that hurt an applicant? Possibly... Reality is a situation no one likes and while discharge brings the end of the debt issue, a whole other situation can arise afterwards due to the stigma of BK. I have worked closely with HR departments in many situations and the picture sometimes is not as rosey as one thinks when it comes to credit checks but in the long run, if one is looking for a job, apply and don't let the BK be a deterrant...if it comes up be honest. Expect a credit check to be run especially if it is mentioned during your interview or if on your job application. Be proactive and be prepared. Competition for jobs in many sectors is stiff. And that BK on one's records could be the deciding issue.

I don't know where you got that I state "that we will be followed around forever by BK, greatly impaired in seeking employment, and pay for hideous financial crimes for years and years to come." No one that files BK commits a crime unless that is how you feel about it. But just cause in one sector (i.e., as you state in yours) there are no credit checks being run, that is only one small segment of an entire job market. Putting blinders on a race horse only keeps him from seeing the horse next to him. There are many other horses in the race.

I am just being open and realistic about the job market so folks will think they are not immune to what is done out there. I am sorry reality makes you feel bad but that was not my purpose. Also, I have never felt guilty about filing Chapter 13...I've run into the good and bad of filing and have been denied credit due to BK and thankfully kept the same job during all this time and not have to have dealt with confronting BK in a job interview; but my husband has and lost his government security clearance over our BK and was questioned about it during a job interview. Best motto ever - "be prepared."

Only select fields (banking, ect) are allowed to ask if you have filed bankruptcy. The question appears on most rental applications, but rarely means much unless the BK was recent. It is all of course a mute point if a credit check is run because they are going to see it.

I understand "reality" well, and have stated the goverment stat repeatedly that 45% of employers check credit. My point has been that this is not a factor for everyone, and I have also said it is all good and well to be prepaired if it is a factor.

For the record, I would simply love to see what would happen if the MN Nurse's Association was hit with even the suggestion of credit being used in the hiring of applicants. It would be dramatic, I can promise you (and would not happen because the demand for RN's is still huge, and because they fully understand the issue is irrelevent).

However, I have said from the start of this thread, it is great to be prepaired but most people do not need to worry about this as a severely limiting factor. Can any of us run into it? Absolutely! I worked for a PM comppnay that started doing credit checks myself, but they were the exception in my industry. The idea that you are not going to be employable with a BK is one of those things that the banks use to scare people out of filing who need to file.