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Credit Check for Background/Pre-employment Check

Established Contributor

Credit Check for Background/Pre-employment Check

I understand the theory of credit checks as a means to gain an understanding of the job applicants "general responsibility" level, but I am curious to hear any insight on experience with this. I am currently still rebuilding, and I am considering federal/state employment (although private sector is not ruled out) upon completion of my current degree program. I understand this to be almost a definite credit check (we're talking mid level positions...nothing executive level).

 

I can understand using this credit check as a "deciding factor" between 2 applicants if every other factor is equal (education, experience, etc), but I am more concerned with what specifically would be a "No-Go" on a credit report (ie they WOULD have hired you if certain things were not on your credit report), and you would just simply not get the position even if you were the only applicant.

 

Possibly things like: currently in a DMP, owe too much, currently behind on certain types of accounts, etc etc.

 

Any insight or experience concerning this would be greatly appreciated.

 

 

Message 1 of 8
7 REPLIES
Valued Contributor

Re: Credit Check for Background/Pre-employment Check


Crossdivided wrote:

I understand the theory of credit checks as a means to gain an understanding of the job applicants "general responsibility" level, but I am curious to hear any insight on experience with this. I am currently still rebuilding, and I am considering federal/state employment (although private sector is not ruled out) upon completion of my current degree program. I understand this to be almost a definite credit check (we're talking mid level positions...nothing executive level).

 

I can understand using this credit check as a "deciding factor" between 2 applicants if every other factor is equal (education, experience, etc), but I am more concerned with what specifically would be a "No-Go" on a credit report (ie they WOULD have hired you if certain things were not on your credit report), and you would just simply not get the position even if you were the only applicant.

 

Possibly things like: currently in a DMP, owe too much, currently behind on certain types of accounts, etc etc.

 

Any insight or experience concerning this would be greatly appreciated.

 

 



I work in a city government position.  All applicants for employment, regardless of the position, must undergo a credit check.  It's part of the application process for our city.  Will credit factor into the final hiring decision?  Possibly.  Depends on the position you're applying for.  If it is for law enforcment or fire department or a position of trust where contact with money is part of the job, then what's on your report could be a factor in hiring.  IN GENERAL, I think that mostly the decision makers are looking for how well you manage your personal finances, and also how truthful you are.  In many positions, employers will ask specific questions about your financial position, and if your answers are not backed up by data in your credit report, then there could be additional questions.  Or there could be immediate disqualification.  Depends on the job. 

EX = 849 EQ = 850 TU = 850 as of 07/2017
Retired and Retiring Cards!
Message 2 of 8
Moderator

Re: Credit Check for Background/Pre-employment Check

Also depends on the state: it's illegal to check credit as a factor of employment in California, I don't know how that is in other states or when we're talking about Federal employment checks.  

 

What I think they were originally for was for positions of financial responsibility, on the theory that someone with substantial debts and outstanding obligations may not be the best for keeping things straight (illicitly or not).

 

Since then people do it just because they can seemingly, credit reports are sadly used in a bunch of places where it's somewhat marketing, but the cost of a credit check is dwarfed by the cost of hiring anyone at virtually any level in any company, so if it can pick out an issue in even 1/100 applicants it's probably worth doing.  Professional level jobs we're talking 10's of thousands to hire someone vs. call it $10-15 additional to include it in the background check process.

 

 

Starting Score: EQ 5 561, TU 98 567, EX 2 599 (12/30/11)
Current Score: EQ 5 771, TU 4 758, EX 2 758, EQ 8 795, TU 8 762, EX 8 786 (7/28/17)
Goal Score:    EQ 5 750, TU 4 750, EX 2 750, EQ 8 800, TU 8 Blah, EX 8 800 (01/01/18)


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Message 3 of 8
Community Leader
Epic Contributor

Re: Credit Check for Background/Pre-employment Check

As a side-not, there is no general permissible purpose for an employer or prospective employer to obtain a credit report without consumer knowledge and authorization, so you will always have the option of simply declining.

 

FCRA 604(2)(A) stipulates that

"a person may not procure a consumer report, or cause a comsumer report to be procured, for employment purposes with respect to the consumer unless

(i)  a clear and conspicuous disclosure has been made in writing to the consumer at any time before the report is procured or caused to be procured, in a document that consists solely of the disclure, that a consumer report may be obtained for employment purposes, and

(ii) the consumer has authorized in writing (which authorization may be made on the document referred to in clause (i) the procurement of the report by that person."

Message 4 of 8
Established Contributor

Re: Credit Check for Background/Pre-employment Check

Thank you for the replies.

 

How do you think being in a current Debt Management Program (DMP) would be viewed by a potential employer? Automatic NO-GO?

 

I mean on one hand it shows you werent able to manage your own finances...but on the other it shows you didnt just ignore it either...

 

Message 5 of 8
Community Leader
Epic Contributor

Re: Credit Check for Background/Pre-employment Check

It would most likely depend upon whether the job involved feduciary responsibilites or need for some security clearance.

Message 6 of 8
Established Contributor

Re: Credit Check for Background/Pre-employment Check

Well, Im more than likely looking at:

 

1. Caseworker   ie Dept of Human Services type stuff, or

2. Vocational Rehabilitation Counselor   (this depends if I continue on a different masters' schooling after this degree program. I really need to figure out if DMP is a problem for this position before I waste 2 or 3 years getting the degree for it)

 

Any guesses on the above 2? I cant seem to get anyone in the hiring dept that actually knows (go figure).

 

Message 7 of 8
Valued Contributor

Re: Credit Check for Background/Pre-employment Check


Crossdivided wrote:

Thank you for the replies.

 

How do you think being in a current Debt Management Program (DMP) would be viewed by a potential employer? Automatic NO-GO?

 

I mean on one hand it shows you werent able to manage your own finances...but on the other it shows you didnt just ignore it either...

 


I think this shows that you recognised you had a problem and were proactive in seeking help to resolve the problem, before it became an even bigger problem.  Going to DMP versus 30/60/90/120+ days late on payments...I think I'd take the DMP candidate, if that was the only factor in the hiring decision.  Hiring folks seem to like a proactive approach !  Use that to your advantage if you get the chance to actually explain what happened. 

EX = 849 EQ = 850 TU = 850 as of 07/2017
Retired and Retiring Cards!
Message 8 of 8