Why do companies run credit checks on job applicants?
Topic: Business letter applying for a job
July 21, 2019 / By Bess Question:
I mean criminal/background checks I get,but credit checks come on!
I mean what does your credit have to do with being able to flip burgers at McDonalds,getting a job at Wal-Mart,cleaning floors,or some other job like that
It's one thing if its a position that involves handling large amounts of money or where you have to draw on a company expense account because they want someone that they're sure will pay the money back!
So what's the deal!
Sorry but to me the whole good credit=good employee thing,good credit=good person thing don't fly with me.There are plenty of bad people with good credit and because of this lousy economy there are plenty of good people with not so good credit who only want the chance to get themselves back on track!
It's like I said how does paying your bills on time equate with being a good worker?It doesn't because if anything its like this:You get a job you get money,you get money you can pay your bills,you pay your bills and that helps your credit score.How I handle my money and how good of a worker I am are two totally different things.In fact how I handle my money is really no one's business,unless I'm applying for a job that involves handling large sums of money!
Best Answers: Why do companies run credit checks on job applicants?
Afrika | 5 days ago
I totally agree Collin. My credit was destroyed by my ex wife, not by any real fault of my own. I am sure I have been passed over for many good jobs because of my credit score. I am older now, which makes getting a good job even harder.
I found myself unemployed a few years ago. I applied for many decent jobs that I was qualified for, but never even got any letters of rejection. I'm sure my credit score had a lot to do with it. With my unemployment benefits running out, I applied to and was hired by a large retailer. Most hourly workers in retail are working poor anyways, so the credit score would mean little. It tends to be those in management that rob the places blind. A working stiff in most cases would feel guilty about stealing the end of a toilet roll from the store's public restroom, no less anything of real value, but for some reason, management, who make 3 and 4 times the money are more likely to let thousands in stock "walk out the back door".
I think it should be illegal for prospective employers to be able to look in to anyone's background any further than if they are convicted felons or not. Bad things happen to good people every day and this should not be used as a tool to prevent them from having a good chance at bouncing back. Thanks to these practices, I will probably be stuck working in retail the rest of my life, with little hope of ever retiring. Sadly, a person is often no longer given a chance to prove themselves at a better position because of $#!+ like this.
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Originally Answered: Did you sign the petition against foreclosures and credit card companies?
That is a pointless and somewhat ridiculous exercise. The government does not have the legislative power to order private companies to give away money. They do not have the pwoer or the right to tell lenders 'you have to allow people to refinance', nor would that work anyway, since the majority of people who are in trouble are upside down. How can legislating a mandatory refinance at 95% of current value help those people? Getting a good rate on a $200,000 mortgage doesn't help if the current loan is $250,000.
As for credit card companies, it is the same thing. The government cannot force a private company to reduce their prices (effectively, that's what reducing card rates is).
People signed up for mortgages they could not afford. They will lose those homes, but it is something they had no right to own in the first place.
People signed up for credit cards, in the full knowledge that they had high interest. The government has no business disrupting the markets by trying to legislate away people's bad judgment. For one thing, it is grossly unfair to those who DID use good judgment.
It depends on the position. If you will be in a management position or handling the company's money, then yes. It isn't the only hiring criteria but it can be considered. The theory is that if you have debt problems, you may be more receptive to a bribe attempt or "borrow" some of the company's money. A lot of companies will ask for permission to run a credit check and not actually run it. But don't let it hurt you if you really want a certain job! I had a friend who had terrible credit due to some financial mistakes he had made in college. The store where he worked wanted to make him a manager but couldn't because they required a better credit score. The compromise was that he became a non-keyholding manager so he didn't have keys to the store or access to the safe. After proving himself to be a good manager, they were able to overlook his bad credit (which he was working on repairing) and he eventually became a store manager. If you think it will be an issue, you can discuss it with the hiring manager. Maybe there was a big medical bill or a divorce that caused the problems. Maybe you just weren't financially savvy and made some mistakes. As long as the problems are in the past and you are actively working on correcting it, I wouldn't see a problem.
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Decent credit shows that a person is a responsible individual. True, not everyone with bad credit is automatically irresponsible, but people who have good credit are inherently responsible individuals. Responsible individuals go to work on time, do a good job, and are generally not flakes. The job market is a buyer's market right now, and employers are able to be as choosy as possible. They will stop doing this when the job market becomes a seller's market again, or when it gets to expensive to run credit. The credit reporting agencies will try to maximize their profit, so they will probably over-extend their price point before long anyway.
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Nicely put Colin. There are those who would like to have another chance to get themselves back on track. If the government can help the big banks and such w/bailout money, why not those who want credit again? Everyone makes mistakes. It's learning from those mistakes that is important. I bothers me a little that Cowboy Neal thinks that those who have bad credit seem ethically challenged towards work. I have some money problems and yet I go to work everyday, on time and work very hard to prove myself to my employer. I would never think about stealing from my employer (or anyone else for that matter) to finance my problems. Funny, those w/money tend to come/go when they want, stand around gossiping and (imo) are plain lazy and rest on their college degrees when it comes to work ethics.
Yes, I know there are jobs where money is involved. Not everyone w/bad credit is a thief and thinks about stealing. To me (again, imo) those w/money are the ones who would steal 1st to keep their high lifestyle just that.
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Originally Answered: I have 1 credit card in collections and the rest are paid, how bad will this make my credit report/score?
First, paying off derogatory items will not improve your credit score. The damage is already done and will remain on your credit report for the balance of the 7 year reporting period, whether paid in full, settled, or not paid at all. However, creditors look at your whole credit report, not just the score. Paid old debt always looks better.
The collection agency does not have to accept your settlement offer. The collector being in Atlanta and you in Michigan doesn't mean they can't sue you. They just have to hire a local attorney -- happens all the time.
How old is this debt? The Statute of Limitations (SOL), the timeframe to bring lawsuit, for Michigan is 6 years. Typically the SOL starts from the date of last activity or last payment.
Generally, if a debt is over 3 years old, offer 25%; 2 or 3 years old, offer 50%; less than 2, offer 75%. Lump sum gets the best deal. Payment plans must be short. Get any settlement offer in writing and do not give the collector direct access to your bank account.
Since the collector refused your settlement offer, let the debt stew a few months. They might be more receptive to a settlement offer.