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Not Enough Credit for the Job?

We checked your credit, and we are withdrawing our offer of the job.

Most people find the idea of a potential employer checking their credit to determine job eligibility morally repugnant. Let’s take a walk in the employer’s shoes to understand and how your credit score is important to more than just your financiers.

Initial Investment

Dollar

Image by Images_of_Money via Flickr

An average corporation which screens potential employees shells out more than $1,000 before the applicant punches the clock the first time. Depending on the position, it can take as long as a year of productive employee service before this money is recouped. Just like every business, they want a return on the investment.

You had to take a drug screen, right?

It should be obvious why drug screens are a determining factor in getting a job. Substances which alter the motor skills and judgment of an applicant can put that person, other people and property in danger. History bares substance users were to blame for the majority of workman’s compensation and corporate injury claims prior to pre-employment drug screening.

What is the harm in a credit report?

Look at the history. Those with a disparate amount of debt to the potential income of the job will be in financial straits. This makes the employee more susceptible to opportunities to supplement his income. Do you see a red flag yet? Look more closely.

But I this will be my second job!

Employees with more than one job are more likely to be absent and tardy given their scheduling. This lost time represents lost productivity for the employer and insufficient return on their investment.

But I have no criminal history!

chain handcuffs

Image via Wikipedia

Potential employees may only have no criminal history because prior employers chose not to prosecute. People who are in debt or poor, even with a job, are more likely to steal than those comfortably living within their means. Even theft of company supplies represents a loss to the employer.

What about those with poor
payments histories?

They do not affect professional skills, but they do testify to the ability to complete assignments. Debts are resultant of contracts where a service or product is provided with the promise of later payment. Potential employees who default on promises have a higher probability to fail to meet deadlines and expectations.

What about inquiries?

If a potential employee has had multiple inquiries into her credit within six months of her application, the reasons for the inquiries are another red flag to a human resource director.

I need this job to pay off credit cards.

When applicants have attempted to obtain additional credit, many times it is indicative of a failure to steward their finances properly. This is more negatively punctuated when the credit is refused.

I have inquiries because I am applying for jobs!

Applicants with many potential employer inquiries are a different risk. This person either does not stay on the job very long or has been such a poor candidate that he has not been chosen for other positions. Both instances are a warning to potential employers.

~~~~~~~~~~

Would you hire me with a poor credit score?

As an employer, would you trust someone who cannot manage her own finances to be in a position of responsibility that could negatively impact your finances?

Scroll down and tell me what you think.

~~~~~~~~~~

(c) Ann Marie Dwyer 2011
Reblogging of this or any other post on Momma’s Money Matters is expressly forbidden.
Copyright and Privacy Policy available in The Office. 



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  1. James Parsons

     /  November 14, 2011

    I have been in those shoes and had to dig my way out. It wasn’t easy by any standards. Bad credit is hard to overcome, but can be done. Once you start getting out of debt, keep heading in the same direction, and your credit will blossom again.

    Reply
  2. I can see a time when it was an indicator. HOWEVER, with the situations many people find themselves today, I’m not as sure. I know several upstanding, hard working people that have fallen on very hard times. They would like nothing better than to pay their bills, but they need a job to do it. Unfortunately, I can see myself being in this position if I am not successful in my job search in the next couple of months.

    I am not a flake. I had good reason to leave my job of 10 years. I have always had a good credit rating. I find I am now a middle age woman in a very tough job market. I understand why employers would want to look into why a person has credit issues, but if a candidate is viable in all other ways, it should not automatically disqualify them for a job. I say, let them explain why they are in the situation they are in. There may be valid and reasonable explanations. IMHO.

    Reply
    • You are right, there are people in circumstances where credit should not be a heavy factor in job placement, like ones with no access to corporate or citizen’s funds. In other professions, I am not so lax. Take for instance law enforcement. To be qualified in most jurisdictions, candidates must have at least fair credit (620+) to get a job. This is to prevent kickbacks and officers on the take.

      Overall, in the last four years, credit ratings have taken a plunge in the collapse of the housing market. I will be (morbidly) interested to see last year’s statistics. I have to wonder how much this has affected the number of candidates turned away from jobs.
      Red.

      Reply
  3. i would say that for a position in finance, yes, it would matter. But, any other positions, where you would not be in a position to be able to withdraw funds or otherwise bilk the company’s coffers, then a credit score should have nothing to do with getting a job – people are trying to get these jobs to get out of debt…

    Reply
    • I agree there are some positions which credit affects not a smidgen. What I find interesting is the perspective of HR on employment inquiries as a valuation of longevity and candidacy. Thanks for stopping by, Marc!
      Red.

      Reply

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