Perception is Reality: Credit Scores and The Workplace

The big interview

When looking for a new job, it’s important to do certain things. For example: network, optimize your resume, and keep your references informed – just to name a few steps.  It also might be important for a job seeker to keep his or her credit report looking clean, and reflective of a responsible person. This because a person’s credit report might be reviewed by potential employers.

Of course, there are myriad other reasons why one would want to keep a good credit record. Particularly, the behaviors that result in a positive looking credit report are ones that probably help us live responsibly, survive, and even thrive.  Interestingly though, based on what I read in an article on Kiplinger, notable percentage of employers actually check credit reports.

Apparently they don’t have access to credit scores. That being said, according to the article, about 13% of employers do actually check credit reports. However, when you narrow down the list to selected positions, this percentage increases to 47%. Persons to whom this might apply to are higher level employees, those dealing with finances, confidential information, etc.

Now, I agree the notion that you simply can’t say no if you’re asked to let them get your report and review it. There is something to be said when it comes to protecting one’s private information, but when dealing with a prospective employer in which you have an interest, you have to play by its terms for the most part. What other choice do you have, other than choose to seek a job elsewhere?

It’s noted that it’s a low level criteria considered by employers, but if it wasn’t important, it wouldn’t be considered at all.  One could surmise that there could be an expectation that an candidate is responsible with personal finance affairs.

I had two immediate takeaways from this:

1) It’s yet another reason to keep good credit. Obviously the actions leading to a good report are important for other reasons, as alluded to above. But this adds an extra layer of importance. Also, it seems like another reason to check your credit report to make sure it looks right.

2) Perceptions are often reality for job seekers.  This is a bigger topic that can apply to any employee, customer, business partner, or other stakeholder. It seems like there are so many perceptions that be drawn, and many of them are actually quite dubious. That being said, it’s simply something to consider, for better or worse. We’ve talked here about how there are some email addresses that are considered uncool to certain employers, and how that impacts perceptions. Also, how some data shows that people with certain email addresses are more likely to have better credit scores than others. Obviously the email doesn’t cause this, but it’s a profile variable.  Anyway, bottom line this that perceptions can matter – and this is yet one more example of this.

Frankly, this makes some sense if you think about it. If you were to hire someone for a position of certain importance, wouldn’t you want to make sure that the individual is responsible? If they’re (seemingly) reckless with their own money, how will they treat an employer’s business?

My Questions for You

  1. Have you ever been asked to allow a potential employer to view your credit report?
  2. What are your thoughts on the two takeaways above (and on this concept in general)? Feel free to elaborate.
  3. Do you think that perceptions matter, even if not entirely fair?

 

 

Comments

  1. says

    Every job I have had since college wanted a credit report. I am always dealing with money. When I was at the bank, I asked why they wanted my credit report. They told me that if I was going to be dealing with other people’s money, I should have my own finances in order.

    I heard that officers had been fired in the past for repeatedly bouncing checks.

  2. says

    I don’t think my employer has access to my credit score, but I’m sure they did check my credit report.

    Is this a good practice? In this economy, probably not, but then employers need some information about the potential candidate’s background.

    • Squirrelers says

      Money Cone – In reality, I’m not sure how I feel about the privacy aspect of the whole thing. It does make sense from an employer perspective, it’s just that the line between private and public seems to have moved in this case. But, maybe a good side effect is to force people to think more about making good decisions.

  3. says

    While I think credit score obsession has become a bit of a mania (thanks mainly to marketing by companies that make money selling credit scores), I agree that, among other things, keeping yourself as ‘employable’ as possible is another excellent reason to care about one’s credit.

    It would be an interesting question of strategy though: If you know your credit is less than stellar, is it better to decline a potential employer’s access to your credit report, or grant access and let the chips fall where they may?

    I think what I might do is grant access but first straightforwardly tell the interviewer that my credit is not what I’d like it to be. I’d honestly relate what happened (to cause my credit blemishes), and tell the interviewer what I’ve done and am doing to to improve my credit rating over time. If the company were just left with the report in a vacuum (i.e., without any context from me), the imagination runs wild and they’re almost compelled by due diligence to think the worst. I think by taking control of the situation and focusing mainly on how I’m working to improve my credit, I may largely undermine the impact of the poor report. The employer will respect my openness and honesty and appreciate that bad credit events sometimes happen to good people. Still may not work, but it gives me the best shot, I think.

    • Squirrelers says

      Interesting. So, it sounds like kind of a pre-emptive move you might be suggesting, for people to bring up issues proactively and put their own spin on it. I suppose if one know for sure that this will be a big issue and credit will truly be reviewed, maybe that’s one approach? I don’t know. Hopefully we don’t find ourselves in that situation!

  4. says

    Amazingly the connection between credit and employers makes sense if you are handling money. If a person has problems dealing with their personal finances, the potential for theft, cash advance requests and other issues is increased. Cab drivers, cashiers and anyone handling money daily runs into this.

    Now, if there is no daily handling of cash,. or any handling of cash, I don’t see a need for anyone to know a damn about you except that you will show up and work.

  5. says

    I don’t like it. There are too much information in my credit report. It has investment property information and other things as well right? The employer don’t need to know that kind of thing.

  6. says

    I agree with Bill – any money jobs, whether actual cash handling or finance related, it makes sense to check credit.

    However, credit can also show how reliable a person is in general. Even if you have debt, if you’ve never been late or missed a payment, your credit score won’t be bad.

  7. says

    Our company does run credit scores and history of applicants. We’ve had several rejections due to multiple bankruptcies and defaults. In positions where the applicant is in a fiduciary position dealing with money, checking credit history is a necessary vetting step.

  8. says

    It’s been a while since I’ve gotten my job, but I’m pretty sure my employer has you sign a waiver, so that they can do background checks on you, which not only includes things like criminal record, but I would bet money a credit report is part of the process.

    I think it does tell you a lot about a person. I checked credit all the time for apartment applicants. I’d like to say that the guy who told me he recovered from his bankruptcy and has turned his ways around was telling the truth, but he wasn’t. He just told a very convincing story. I decided to give him a chance anyway and overlook his credit history and it ended up being a mistake. I think in interviews you can say whatever the heck you like but it’s important to find other ways to corroborate the words with facts.

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