Why Do Some Jobs or Employers Check Your Credit History?
Looking for a job is not easy in this economy. Most people who are looking for jobs are concerned with their abilities and qualifications, but there is something more that they should consider. A recent study showed that 60% of employees conduct credit checks on their potential employees before hiring. Job applicants have to be concerned with more than their qualifications these days. Most people are not worried about their credit when it comes to getting a job. Some argue that credit history has nothing to do with getting a job but that doesn’t stop employers from checking credit anyway.
Why Check Credit History?
Checking credit history has increased in recent years. More and more employers see the importance of good credit history with their employees. Here are a few reasons that employers check credit history:
- Applicants apply for a specific job category. Just about any position where employees work with money will check credit before hiring. Positions in government, banks, financial institutions, and brokerages require credit history checks. Any position that requires employees to handle money may require that the applicant forgo a credit check.
Many people may not think that this is fair. Employees think that those with poor credit may be a threat to the business. There is the potential for embezzlement and fraud in any position that requires employees to manage money.
- Employers want to reduce the number of applicants. Some employers may have to choose from hundreds of applicants for one position. The decision becomes increasingly hard when all of the applicants are highly qualified for the position. Many employers may have to result to checking credit history to decide if applicants qualify for the next level of interviewing.
Many people think that this method of eliminating applicants is unfair, but employers have the right to pull the credit of their potential employees. When they pull credit, they are looking for things such as late payments, maxed out credit cards, bankruptcies, and liens. They may view applicants as a potential risk for fraud if they have excessive amounts of debts.
They sometimes use credit history checks to verify information. For example, an employee can verify that an applicant worked for the companies that he or she wrote on the application.
- Employers conduct credit history checks for promotions. Employers may also conduct credit history checks after hiring an employee. Future bad credit may cost the current employee their promotion. For example, if an application had great credit when they were hired, but has bad credit 5 years later, they may be overlooked for a promotion. Some employees believe that excessive debt may distract an employee from their new responsibilities. Many do not want to risk putting someone in a higher position only to have them do a less than perfect job in the new position.
It is always a good idea to keep credit in good standings because applicants and current employees never know when an employer will check their credit. Employees should do everything in their power to focus on the qualifications and abilities instead of the credit.