It can backfire though, and not through the applicant's fault. I have a friend who spent some time working with a historical society and because of shoddy record keeping and budget constraints, there was very little record of her employment there, and anyone who knew of her work there had moved elsewhere. So even though it says X on her resume, and she had an address in the area, there wasn't record of her work and the hiring people had find a way to sort that out and confirm her resume.

Hmm...didn't knew Chexsystems keeps a report on bounced checks, I thought that was a bank thing.

While I don't blame a company for wanting to hire good employees I don't believe what this person is saying. I think there is something else going on.

@savdavid: What? Discrimination? I just don't see how potential employers running background checks that include credit checks are indicative of discrimination across the board. Certain federal government agencies run credit checks all the time. It doesn't mean they're discriminatory, or only want X race working for them.

What's wrong with raising an eyebrow to someone's mounds of debt and potential for financial catastrophe?

I'm wondering how people without any credit history are treated. When I asked Equifax for my free annual credit report, they didn't even have me in their database (even though I've never had any credit card, mortgage or loan, I assumed they'd have my payment history for utilities). I got all my jobs through my connections, but in time I may apply for a new position in a company I don't have contacts in. I'm wondering whether the lack of any credit history would hurt me or not...

"Theft"? How many boxes of paper clips would it take to pay off that weekend in Las Vegas someone would like to forget?

@bloggerX:

The banks report bounced checks to ChexSystems. Just as you can be denied a credit card for poor credit, you can also be denied a checking account for too many bounced checks. With the prevalence of debit and credit cards, checks are becoming obsolete so you hear less about ChexSystems.

@Jozef: I think it would be quizzical because almost everyone has some kind of credit history - so they'd probably just look at you as some kind of exotic credit-less zoo animal. Or they'd think they made a mistake or the system was broken. And they would wonder why you never had a car loan or bought a house or even had a down payment for an apartment.

Heck, cell phone companies run credit checks. Apartment complexes run credit checks. No offense - I'm just finding it really difficult to comprehend how you don't have any credit history. Don't bank accounts factor into credit history in that they show up on credit reports?

@pecan 3.14159265: b/c there's no known correlation between a person's ability to do a job & their "mounds of debt"?

even donald trump has filed personal bankruptcy twice & has a history of not paying his bills, but he's still one of the most successful businessmen of our time.

@Gramin: Oh yeah, I forgot about that. Worked for a credit union and completely forgot!

@pecan 3.14159265: I had a problem with my bar application because I reported that I worked as a RA for a particular prof for like 7 months, which I had, and the school reported that I worked for him during 3 summer months, which is their standard report for ALL RA positions regardless of how long you worked an an RA. This raised a question about my honesty, and involved me getting signed statements from the professor, the dean, the payroll people, and signing an affidavit saying I really, really worked for the dude for 7 months and no I was not shitting them.

I was like, "SRSLY, law school? SRSLY? This has never before come up as a problem? Or do you just not care if you screw graduates?"

I suppose they figure that responsible with credit = responsible in other areas of your life. The whole more likely to take bribes etc only really makes sense in a few specific jobs.

Even though I have great credit, I'm annoyed that your credit report is taking over yet another aspect of your life.

People from different ethnic groups such as Vietnamese do not always use traditional banks especially for loans. I have seen very well established professionals who do not have credit cards. This makes getting a mortgage more difficult.

Have you ever been denied a job because of your credit?

^^one of my biggest issues with this whole practice. employers rarely tell you why you weren't hired, but if credit was a factor, they should be sending you an "adverse action" report which includes the reasons you were denied as well as the right to access a copy of your free report. failure to do so is punishable by a fine.

has anyone ever received one of these reports from a potential employer b/c they were denied a job?

@pecan 3.14159265: Not necessarily. A recent immigrant would have no credit history and need to find work.

@mac-phisto: I think part of the problem is that so many people lie/embellish their resumes to the point where they only become a shell of the truth.

As a result, a company hires a candidate that looks stellar on paper but in reality is anything but. Hiring and training are significant costs for a company, I don't blame them for wanting to be picky about who they bring on.

@Gramin: not entirely accurate. banks report "closures" to chexsystems - these are accounts that are closed with an unpaid balance. the reason for the balance could be checks, deposit fraud, debit card use, etc., so it's not contained solely to "bounced checks".

chexsystems is owned by FIS, as well as their sister operation, certegy, which actually maintains a database of bounced checks at their member merchants. the two operations are managed independent of each other, but you can gain access to both databases for verification purposes.

My resume says (correctly) that I've worked for a company in Troy, MI for the last five years, and I haven't been anywhere in Michigan for at least 15 years.

@Jozef: I'd assume that, generally speaking, people with little or no credit history (eg new grads, immigrants, etc) wouldn't be hired into positions where a strong credit history is needed. Or, perhaps, people hiring for positions typical of that set would overlook a few transgressions in the candidate's past.

Checking your Credit Report is done to weed out bad candidates. If you can't manage your own finance what makes you think that I'm going to trust you managing a corporation's finance?

@pecan 3.14159265: As dragonfire said, recent immigrants may not have credit reports. However, I've been in this country since 1995, so I'm not all that recent anymore. However, over the time I always paid with cash - that included all my cars. You are right; my wireless carrier checked my credit report and when they didn't have any credit history, I had to deposit 6 months worth of monthly charges with them. Same with my apartment complex, even though the deposit was relatively smaller. And the same with all utility companies. I've got enough deposits tied up with various companies that if I ever decided to go back to Europe those deposits would cover all my moving costs (a slight exaggeration, but not too over the top). However, because I've never owed a single penny to anyone and use almost exclusively cash or personal checks, no entry for my SSN was apparently ever created with Equifax.

@larrymac: I could see that. I work in one of my company's two offices, but of our ~1200 employees, all but about 100 of us work either from their homes or at client sites dispersed throughout the country.

@Jozef: I wonder the same thing. I've been hired for the last two jobs I applied for, but when I checked my credit score recently I found that the only dings on it were things that wouldn't (or shouldn't) bother most employers: mainly, not a long enough credit history or enough of a credit limit. Then there were a couple of late student loan payments five years ago. No mention of the fact that I'm debt-free or my record of paying phone bills on time. My credit score is not fabulous (in the 600's) but I wonder how much it would really weigh on my chances of employment, given that my financial picture is relatively solid.

"If my résumé states that I worked at a company in Pittsburgh for five years, I should have a western Pennsylvania address listed as a former address on my credit report. If that address isn't on my report, it's possible I'm falsifying my résumé."

Unless you work remotely using the intertubes to connect to the office and live in a different state. I live in NY and the office is in IL.

Well, don't most people file bankruptcy for medical reasons? Seems like that was in the news very recently. Wouldn't getting a credit report on someone be medical discrimination?

@Eyebrows McGee (now with more baby!): Though in all fairness, it was law school you were applying to.

Also, it probably was an exercise in how to make other peoples lives suck.

/snark

@mac-phisto: On the other hand, if I had two candidates, both of them about the same in credentials, and one with a crappy credit report, and the other one with a clean record, i'd hire the one with the better report.

@HungryTuna: "can't manage your own finance" applies to some portion of those have bad credit ratings. Do YOU know how to sort those out from all the others with bad credit ratings for other reasons, such as a major medical crisis in the family? Do you even bother? Do you even care?

@Jozef: 80-something year old mother doesn't show up on any of the three agencies ... even though she receives SS & pension checks and has a checking acct w/ an unused debit card (but no credit cards or debt).

On the topic of recent immigrants - yep, that's the shake. No credit history to speak of, but most potential employers are going to know that right off the bat and shouldn't expect you to have credit because you haven't even lived in the country for too long. And if you have lived in the country for pretty long, there are valid reasons for being "off the grid" but should not necessarily hinder your chances of getting an established job in a higher field (i.e. not waiter jobs that a lot of immigrants are locked into).

For immigrants who don't use traditional banking systems - that's the shake. You come to America, you want jobs in tech, finances, anything that isn't liable to be under the table or a menial job - you have to use our banks. Stuffing a coffee tin with money might have gone well in other countries, but in America, you have to work with the systems you've chosen to adhere to by the act of immigrating here. My grandparents had to do it, my parents had to do it.

SERIOUSLY looking forward t going back to work after a 17 year hiatus due to advanced HIV disease and the abysmal credit that goes along with that (repealed) death sentence.

Is the correct term fries WITH that or fries with THAT? Post-grad counselor wants to know.

@pecan 3.14159265: I had a similar problem after finishing college.

I worked for the university while I was an undergrad, 20-30 hours a week during term and full-time during summer and winter breaks. Then I went to grad school elsewhere.

18 months after finishing college, I was heading into the end of grad school and applying for jobs. I wasn't allowed to do anything but TA while in grad school (long story, terrible administration, department head who got ousted despite tenure) so I was going back to my college job for references.

Only... in that 18 months, the university had disbanded the department. The functions were taken over elsewhere, but all of the full-time (non-student) employees who had been there had either retired or left the university. Out of 7 staff members who could at least have verified that I'd worked there for 3 1/2 years, not a one was still reachable by any contact info I had.

Another aspect to factor is that it's very possible that a credit report does not correlate to job performance, but having a bad credit report and current debt may affect a candidate's chances from an emotional aspect. If a potential employer thinks you're a stellar candidate, but you've got significant current debt and longstanding debt, the employer may wonder whether you're committed to the job 110% or you may be worrying about your finances while you're on the job, and would be distracted by your money problems.

Not saying it means that potential employers should only use that as a yardstick for hiring, but I'm sure it happens. If they don't get the feeling that you take care of yourself financially, they probably don't get the feeling that you won't get sidelined by your difficulties at home. No one wants to hire an employee and get all of that baggage to go along with it. They can't account for everything, of course, but if they see that this is the one thing they can control, I bet they would try to get the least worry-free candidate (in their eyes).

@Trencher93: I don't think it says on your report why you filed for bankruptcy, so the candidate should try to explain. I believe it's medical discrimination if the potential employer rejects a person because of their medical history, but a credit report doesn't have anything to do with that.

@pecan 3.14159265:
how does a historical society not keep records of their own business affairs like that? you'd think they would be pretty good at something like that.

@Jozef: Apartments and utilities won't show on your report beyond inquiries, and those are only recorded if they find a file.

If you default the collections will put you on the credit report, but they certainly don't routinely report positive data.

@pecan 3.14159265: Bank accounts don't show up on your credit report unless you're delinquent/in collections with them.

The same thing applies to apartment rent and paying normal bills like utilities, and cellphones. All of these positive/on time payments are never reported.

You wouldn't have a credit history unless someone extends you credit of some kind. The only thing that would come up is your name/address and any hard inqiries you have had on your report.

long story short I was working for Royal Bank when my job got outsourced to India (tech support). I applied for an internal posting within the company and was offered the position since I had good standing within the company pending credit and criminal (they only had prevously done a criminal check)

lo-and-behold I was declined with no reason stated

@frank64: I realize what you posted is true frank, but what is the point? Of course people who do not use the current established financial market system do not get benefits from it. If those people want to obtain a mortgage, they have options through non-traditional means. The rate and terms may be terrible through the local mafia but everyone has the same set of options to establish a credit history.

@sir_eccles: Then your resume should clearly say you are a telecommuter and do not work at the physical location. The point is that claiming to work at a location should be accompanied by verified address somewhere within driving range... or a very good explanation should be needed.

I never understood this. I just don't se how this is NOT a form of discrimination.

My roommate was FIRED after a merger because of his horrible credit.

Oh State Street he barely knew ya.

@pecan 3.14159265: So society is supposed to make important decisions about its workforce based on your untested armchair surmisings. My sister, who is a hiring manager at a medical practice, says the most common reasons for the failure of her employees are family problems, substance abuse, and "not showing up for work on time, or at all." From this report, it appears that people worry most about their families and their fixes, not their finances.

Credit histories don't measure "emotional aspect," whatever that is. Employers who make unproven assumptions by reading wildly between the lines of a credit report are shortchanging their company and their other employees. It also means that the employing managers are irrational and probably cannot be trusted to make good management decisions, since they cannot grasp what are appropriate evaluation criteria in any given situation.

These days, the shrinking economy has taken down many competent workers, and left them with no means for paying their bills, leading to poor credit. What employers are really doing with credit reporting is using it as a false shorthand for making decisions they should be making through careful consideration of workplace characteristics, personal interviews and reference checking. But the American employer is too cheap and too lazy to make the effort.

You may be surprised to learn that there exist many verified and reliable tests of workplace competence that can accurately measure characteristics such as punctuality, cooperativeness, dedication, and ability to learn on the job--even soft characteristics like customer service skills and willingness to narc on other employees who are doing wrong.

Again, employers are looking for shortcuts that allow them to appear that they're doing the job, even when they're not. Credit histories have been shown to have no statistical relationship to workplace characteristics, and from that perspective must be seen as a whitewash.

I sorta understand the logic behind it including fact verification but it still sounds like profiling to me .

My credit report has woefully wrong information, not to mention all the crap from an employer a few years back that I'm in a legal battle against. I tried to "clean everything up" but it just gets switched back within a month.
We need to do something about this B.S. When did this commercial document, which is run by for-profit corporations, that don't even match 90% of the time, that is not even correct most of the time, where any schmo can report something and you can't do a goddamn thing about it become such a be all, end all?
It's ridiculous is what it is.

@rpm773: I've done lots of these professionally. Usually, the main thing is that the record be clean. The only thing about an "empty" credit history, is that it might raise eyebrows if you are in your 30's, but that's about it.

@StutiCebriones:

You do realize that some people have jobs that expose them to large amounts of money - banking or investments where they have access to lots of peoples accounts, payroll or accounting or bookkeeping jobs, or jobs where you have purchasing authority to buy hundreds of thousands of dollars worth of stuff?

@Garrett Manion: It happens. You have four people to do the work of six, you lose paperwork, things get shuffled, etc. It happens to a lot of places.

@Trencher93: In most cases, the entries on a credit report only show the creditor's name and amount, not the reason. The fact you have a debt in arrears is the reason you might be denied the job, not the nature of the debt (unless you are stupid enough to run up big bills with HARRY'S HOUSE OF PORN and S&M LEATHER GOODS).