Why do employers do credit checks?

Question

And if you have a low credit score or judgements on your credit report, why would that exclude you from a potenial job? I dont understand it, I was disqualified for a job because of my credit, yes its bad,but thats why I'm looking for a better job to fix it. Is it a catch 22, damed if you do and damed if you dont, whats the deal?

Personaly I dont think I'm irresponsible, but I have made some bad choices when I was younger and I dont think employers should judge character by past mistakes. It really sucks!

Answer 1

Altho I think it is none of their damned business what you do on your own time....

They do them to see if you live beyond your means... liable to steal from them because you spend too much.. (how about paying more?)

The want to see if you are responsible, and pay your bills or let things slide... (lazy?)

It is also a sneaky way for them to see if you are making any payments to the courts (arrested?) or if you are a deadbeat child support parent... also none of their damned business...

I hate the way this country is allowed to operate.
Corporations .... it sucks.

Answer 2

If the job involves handling money or being around it, employers are just covering their butts.
There are people out there with back credit for whatever reason & the employer can run the risk of hiring someone who may steal money to pay creditors or support drug or gambling habits or compulsive shopping.
That is why it is important to NOT spend money you do NOT have & do your best to keep up your credit rating. This shows that you are responsible & worth hiring.... It's not really any different than employers who pass on potential employees because they have long work histories. This show too that the person is not responsible & are not worth training for a job they will either quit or get fired from....

Answer 3

Well low credit can be a sign or irresponsibility. A potential employer is looking for someone who will be responsible. The idea is that if you can't even manage your own affairs how could you do a good job at work. As well if you have bad credit, than potentially you could be looking for a way to earn "extra" cash. They might see you as more likely to steal and therefore less trustworthy.

Most off all their is just the idea of bad credit and the negative context of having bad credit. If you have bad credit than you may owe people money and could be more likely to engage in bad behavior that reflects negatively on the employer. Its the same as how a criminal record can exclude you from jobs.

By the way the you in this case refers to you in a general sense and is not refer directly to the asker. I am not saying that the asker in particular is like this

Answer 4

Because the prevalent wisdom is that if you cannot handle your own finances responsibly, how can you possibly handle our responsibilities? In the era of loss prevention, employee embelzelment and outright employee theft, we want to make certain that you have no reason financially to be dishonest. Particularly, in positions where an employee is handling money, accounts receivable or accounts payable, employers want to ensure that employee will honestly perform those duties and has no personal impetus to steal, set up shell businesses in which to funnel funds or otherwise siphon off monies to meet personal obligations.



Actually your credit record does tell a lot about you. Maybe not if you can turn on a light switch but if you pay your electric bill when you do. I personally wouldn't hire or even trust someone that has numerous outstanding debts. Your credit report shows how trustworth of a person you may be. If you don't pay your bills you are esentially stealing from your creditors, and who wants a thief working for them? An honest person that has debts would contact their creditors and make payment arrangements and therefore not have a negative credit history. Your employer doesn't want someone who has 5 credit cards maxed out running a cash register or handling their finances.

These things can help them determine your character and if you have a good work ethic. Also, if you have a past history of skipping out on landlords, or bills, you might do the same on a job. If you have embezzled money or had anything like that in the past, you wouldn't be put in charge of money. If you owe a lot of money on credit cards, or have judgements against you, you might be more prone to steal from the company to pay off debts, etc etc etc. Get used to it-everyone asks for it now.

Answer 5

Its not simply your credit score. A credit report tells alot about your financial character to a person who knows how to read it. It also tells about previous employment, addresses, aliases, etc. Its a way to check for stability and is simply a way to check your honesty. They will check your application against your credit to make sure that it is consistent. Employers hire people with poor credit all the time. But if they have reason to believe that you have been untruthful then they may look the other way. If you say that you worked at one employer for seven years, but it only shows up for one year on your credit....you'll need a good explanation.

The particulars of what they look for in part depends on the job that you are applying for. For instance a company that sends people to help take care of seniors in their homes might be very concerned if they see that someone is in dire financial straits, since they don't want thier clients to be targets for theft. Other businesses may not care.

Another potential red flag is a person who clearly has the means to pay their bills but simply chooses not to. This is often a sign of some kind of addiction (gambling, drugs) unless there is some other explanation (incredible medical bills?).

I can't say why you weren't hired in your case. But, if I were you I'd get a copy of it and go over it with a fine tooth comb. Credit reports are so crucial, and yet so often flawed. Thats why you check them every year. Unfortunately reading one is like reading greek. Ask someone who is used to doing it to help you out.

Answer 6

Some employers are under the impression that having a disorderly credit history could also mean you will be like that as an employee. Employers also like to do background checks to see how responsible the potential employee is. It also tells them if there are alot of garnishments that will be coming out of your pay which can be a headache for them. These are all theories and what I believe is that it is on an individual basis.

Answer 7

Employers usually see it as someone who is irresponsible and who will probably be looking for raises more frequently. They also find that those with low credit are more likely to steal.

On the other hand, some employers see low credit as a good thing because it means the employee NEEDS the job and will be less likely to quit on a moments notice. These tend to be employers who will not be trusting the employee with cash and/or large amounts of inventory.

Answer 8

Credit checks can show if you are a responsible person or an irresponsible person. People that are bouncing checks are more likely to steal money from an employer.

Answer 9

OMG this is such a good question I can't believe I didn't think to ask this. I also have been excluded from potential jobs because of my bad credit even though alot of it is from my divorce. Good luck to you and hope we can both get a good answer and a Great paying job!

Answer 10

To see if you are high risk for stealing... I guess.
Lol!