Increasingly, as part of the background check when you apply for a new job, employers are asking if they can have a peek at your credit report. It is true that they are supposed to get your permission before looking, but denying your permission could be seen as a negative that could hurt your job prospects.
Why does a potential employer want to look at your credit report? Many people wonder why an employer would care about what is going on with your finances. However, there are some reasons that employers might be interested in knowing how you handle your debt obligations:
The most understandable reason that certain employers may may want to look at your credit report has to do with security. If you will be working with sensitive information, or if you are in a position where you are handling money, employers might want to know whether or not your poor financial situation would make you vulnerable to bribe attempts. If you have a lot of debt, some employers might worry that you would be willing to sell proprietary information to a competitor, or that you might embezzle funds that you are overseeing.
My brother in law was denied a job as a security guard due to blemishes on his credit report. While employers have to let you know which credit bureau’s report was used as part of the decision, and while you are entitled to a free copy (in addition to your free annual copy) of your credit report when an adverse action occurs because of the information it contains, it does little to comfort you when you don’t get the job you want.
Other Concerns About You
Another reality is that some employers use the information in your credit report to make judgments about what sort of employee you will be. Increasingly, there are those who not only use your credit report as an indicator of how you meet your financial obligations, but also as way to judge your character. If you are not responsible with your credit, some employers might fear that you will cause problems at work, or exhibit laziness on the job.
Judging potential employees in this way may not seem fair to many people. Indeed, the fact that credit reports and credit scores are becoming such an important part of everyday life and decisions about you and your abilities, is a sore point for many. However, this doesn’t mean that it isn’t happening.
Reducing Behaviors to Numbers
Everyday, employers, insurers, lenders, cell phone providers, lenders and others make decisions about who they think will be reliable based on information in your credit report. In some cases, your entire character will be judged by a single number. While employers, at least, aren’t supposed to look at your credit score (although some do), they can still get a lot of information from your credit report. Whether you move around a lot, how much debt you have, and even what names you have used in the past can be information they receive from a credit report.
In a world where information is easy to come by, and where our financial moves are tracked regularly, it is easy to see why more people are relying on this information to make judgments about you — even character judgments that may not be fair.
Do you think employers should look at credit reports when making hiring decisions?