A reader writes:
How widespread is it to look at a job applicant's credit history when considering them for a position? Why is this done? It seems like a complete invasion of privacy and a means to see how much salary you "really" need.
For a young person starting out in their career, I have a great credit score, but tons of debt. I am very responsible in paying my bills, but I don't see why this information should be available to anyone other than myself. And for those who are also unemployed and don't have a good score, what a horrible catch-22.
Shed some light please?!
It used to be that job seekers would only encounter a credit check if they were applying for a job that involved handling money or having authority over money. Some employers are now starting to use them more frequently -- but certainly not all or even most.
For positions handling money, credit checks are done to see if you have a pattern of handling money responsibly, or whether you have a checkered history that might impact your integrity and reliability when it comes to the company's cash.
For other types of positions, some people think that a credit report can show patterns of poor decision-making or lack of responsibility -- using it almost as a character reference.
Personally, unless the position handles money, I think credit checks are an invasion of privacy and the sort of over-reaching and abuse of power that really irks me to see in employers. Not only that, but I don't know of any research indicating a correlation between good credit and strong job performance, so I think the whole practice is suspect.
(By the way, Liz Wolgemuth has a great article here about a bill that was recently introduced in Congress to prevent private non-financial companies from running credit checks on job candidates.)