Why do companies do a credit check before hiring?

Answer 1

it's whitey's way of keeping us down

Answer 2

Ok, there's a lot of weird answers about this here but only one CORRECT answer.

The correct answer is to guage your likelihood of committing theft from the company.

Essentially they figure things this way:

Someone with a very low credit score is more likely to be desperate for money and more liable to steal from the company or be influenced by an outside agency to give up private information about the company to others.

Someone with good credit is probably not in desperate need of money and has something to lose and would therefore be far LESS likely of theft.

There is precedent for this thinking. In a study done by MIT in 2002, 74% of office theft occurred by people with a credit score BELOW 550. A whopping 89% of office theft was committed by people with a credit score below 500. And those with a credit score greater than 675 committed less than 1% of reported office theft.

I guess that means they either really don't steal from the company or are much smarter and don't get caught!

Answer 3

Many employers view the credit bureau report as a peek into your organisation skills, judgement and discipline.

If you are applying for a job that involves your ability to manage money, assets or expense accounts, they rationalise that if you handle your finances in good order, you will handle theirs in the same manner.

Some view your report as a potential for misappropriation, or theft. Taking supplies home, padding an expense account, etc.


Given two applicants of equal skill/education, etc. the credit bureau report can be a 'tie breaker'.

Answer 4

Actually, this is something new...and is expanding to other areas. To tell you the truth, there is no good reason why they do it...other than to give them an out if they want one! Does a bus driver with good credit drive better than one with bad? What if their "bad credit" resulted from a medical issue, and not something they could control - does this make them a deadbeat? People often times equate "bad credit" with "irresponsibility", and that is not always the case.

Answer 5

i've often wondered this myself, which is why, when applying for a job, I DO NOT put my social security number on the application. Not only because I do not want them checking my credit, but you never know who the receptionist is taking the apps from people (this does not imply that all receptionists are bad people, in fact probably the opposite, but why take that chance?) Then once offered a position, I disclose this info as it is necessary for them to have it for tax purposes.

Answer 6

They do this to see if you are responsible enough to handle a position at the company. Bad money management is usually a symptom of lack of management skills in other areas of one's life. The thinking is that if you can't control yourself, and are a fully-functioning adult, then you can't handle the responsibilities associated with the position. Hope that helps!

Answer 7

to see if a potential employee is responsible enough. if he has bad credit, then he isn't very responsible. sometimes a good credit history weighs more than employment references.

Answer 8

because its a police state, they have no right to look into your personal status. if the company wanted a loan they wouldnt look into the directors personal status because the company would be ltd/or plc. their are lots of directors with bad credit running big companies.

find another job, i hate this police state ****!

Answer 9

to judge likelihood of theft

it's not whitey's way of keeping us down!!!


Signed,
Whitey

Answer 10

to see if you are responsible enough to handle thier money