Credit check: Should prospective employers be allowed to ask for your financial history?

[marmar]

from the Detroit Metro Times:



Credit check
Should prospective employers be allowed to ask for your financial history?

By Molly Tippen


You are deep in debt, out of work and in desperate need of a job when a prospective employer asks a question you weren't expecting: "Can we look at your credit history?"

Many people in this predicament face a lose-lose situation, experts say. Deny permission and that prospective employer might think you are hiding something and automatically pass you over. Give them an OK and, when they see what a mess your finances are, there's a good chance you won't get the job anyway.

And even if your finances are sound, you may come away feeling your privacy has been invaded.

With an official unemployment rate near 10 percent nationally — 14 percent for Michigan and nearly 15 percent for metro Detroit — more people than ever are being affected. But, from the perspective of job applicants, it is largely an issue without a champion.

Proponents of the practice — including the companies that turn a profit selling your credit history — have deep pockets and lobbyists. But those looking for jobs are mostly on their own, with little recourse available.

.....(snip).....

Michigan House Bill 4528, sponsored by Rep. Jon Switalski (D-Warren), is an attempt to help the state's beleaguered job seekers. The bill seeks to prohibit the vast majority of employers from asking applicants for permission to check their credit. If the bill becomes law, employers who fail to adhere to it can be sued by those seeking work.

Only specified employers such as banks, credit unions, accounting firms and casinos would be exempt, allowing them to ask prospective employees for permission to review their credit histories.

Although Michigan's high unemployment rate means this is a particularly pressing issue here, it is a matter getting attention across the nation. .............(more)

The complete piece is at: http://www.metrotimes.com/news/story.asp?id=15118

[JuniperLea]

1. This is standard in Los Angeles...

And has been for more than a decade as far as I can remember.

[Hannah Bell]

5. not only la, everywhere, & more than 10 years. detailed computerization of

financial records made it possible & individuals' records became accessible without discussion or debate.

should it be?

no. only criminal prosecutions should be; it's no employers business if i have/had trouble paying my bills, or never took out a credit card or bought a house or any of the things which go into credit scores.

only if i've been convicted of a crime, financial or otherwise.

[JuniperLea]

12. "only if i've been convicted of a crime, financial or otherwise"

I agree.

Besides, I've seen people embezzle with no priors at all... so... unless there's a really good litmus test, I think employers need to chill.

[Hannah Bell]

13. it really bothered me how credit reports so quickly became part of hiring practice, &

largely under the radar. suddenly there was this whole surveillance system in place that most people didn't even understand.

very orwellian & creepy.

[JuniperLea]

26. Yep...

We just go along with anything, don't we? Even those of us who consider ourselves aware!

Very, very creepy.

[Liberal_in_LA]

16. not everywhere in LA

[JuniperLea]

28. Depends on the industry...

In financial services, youbetcha.

[Gormy Cuss]

21. There's a growing backlash against the practice, finally.

It's reading tea leaves at best since even the credit bureaus admit they have no unbiased research to back up the notion that it's an effective screen. CA would've had a law in place two years ago had Schwarzenegger not vetoed it.

[JuniperLea]

27. Yep... either or...

Either someone with bad credit is a good risk because they really need the job... or they're a bad risk because they are going to rip off the company. Paranoia strikes deep... creepy.

[KonaKane]

32. Here they are considering making it illegal on renter's applications

And its about time. It is nothing but an unnecessary intrusion into a person's private life meant to weed out "economic undesirables" by class. I've heard some landlords say that it is helpful in determining who might be a bad risk for rentals, but many others who came forward to say it's not a good indicator at all - and that they know more of their rich friends with bad credit dings than the workaday folks.

[KansDem]

2. No...

...and they shouldn't be permitted to check your urine, either.

[midnight]

3. It seems like a NO brainer to me, so NO!

[Iggo]

4. They. already do.

The question should be, "Should prospective employers be barred from asking about your financial history?"

[Kerrytravelers]

6. This is just terrible.

I'm a teacher. I've never been asked my credit history. I'll have to ask Mr. kt and see if he has.

[Kutjara]

7. If the employee is going to be handling large amounts of money,...

...or will have signing authority over a substantial budget, then it may be appropriate to see if they have a history of bad debts or bankruptcy. Otherwise, there is no business reason for knowing a prospective employee's credit history, so employers have no reason to pry.

[Recursion]

9. Why?

Presumably if you're applying to work with a large company budget you've dealt with companies' budgets before. Why not just look at your work history? Bad credit doesn't always imply irresponsibility: it can mean you had a medical problem, or an irresponsible spouse/SO, or listened to Jim Cramer too much, or....

[Lance_Boyle]

25. Doesn't

listening to Cramer too much constitute (gross) irresponsibility?

[Name removed]

8. Deleted message

Sub-thread removed by moderator. Click here to review the message board rules.

[haele]

10. Honestly, the only job that should require a credit check is something in finance

that actually handles or manages money. And even then, there needs to be the ability to show mitigation efforts for those that might have been unlucky. A prospective employee shouldn't be screwed because of an ex-spouse or medical issue.
As an indicator of risky habits, it tells the employer nothing. A criminal check or Facebook sweep is a much better indicator.
I was only asked that question once, and I replied "no, because there's an unexpected expense that's in the process of being worked off and the credit report would reflect that."
I still got the job offer as a finalist. Didn't take the job though, because I got a better job offer.

Haele

[Oregone]

11. Wouldn't that indicate a better worker?

More indebted means more desperate for solid employment? Just curious to how this is being used.

[aikoaiko]

15. Employers look at poor credit and extreme debt as negative in multiple ways.

People in debt are stressed and unhappy. Stressed and unhappy workers are not desirable workers.

Also, some people have debt and poor credit because of a lack of conscientiousness.

Of course, people who get laid off or experience big medical bills at not fault of their own can easily get caught up in poor credit, too.

[Oregone]

17. Its not always true though

Sometimes stress and desperation is a great motivator to pull extra hours and be extremely reliable.

Unstressed...well...like me...can make you a shitty worker as well

[proudohioan]

22. LOL!!!

Oh, thanks for the laugh! I needed that one!

And the more desperate for solid employment means more unreasonable shit that the employee will actually put up with?



:rofl:

[aikoaiko]

14. I haven't heard of this happening in academia yet.

Just criminal background checks.

[Recursion]

19. Because every professor was at one point a grad student NT

[NNN0LHI]

18. Employers hate to have to deal with an employee who's paycheck is being garnished

I do know that. I think some places it is reason for termination? They almost have to hire another employee to keep the garnishments straight. Get the money deducted and forwarded to where it is supposed to go.

One guy where I worked had a unique system. He was a drinker so the boss was instructed to never give him his paycheck under any circumstances. He was instructed to hold the check until the guys wife came in on payday and was to only give it to her. It worked out OK for everyone that way.

Don

[intheflow]

20. K&R n/t

[NeedleCast]

23. Companies are Asking?

In three of the four interviews I did while job hunting this winter, I was *TOLD* they would be doing a credit check.

[Subdivisions]

24. Some people still just do not get it...

This is a way for corporation and businesses to be able to legally discriminate against "undesirables". People with bad credit are likely to be the same people who are part of the lesser economic classes. Most poor people will have a challenged credit record. Many middle class do too. This is just a way to weed those people out.

[Lucian]

29. Absolutely not.

[Zorra]

30. No. I have no credit history. I never had, or wanted, any credit. So I am penalized

because I have always been fiscally responsible and paid as I go, and therefore have a low credit score because I never borrowed any money.

Credit rating agencies should be illegal.

[KonaKane]

31. Hell no. It's none of their business.

They have every right to check your resume, your work experience and with past employers, and maybe for criminal records. Thats it.