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

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!

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.