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Why do some jobs do credit checks?

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asked Aug 31, 2015 in Business by anonymous
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In a recent survey, the Society of Human Resource Management found that 60% of employers run credit checks on all or some of the people they are considering hiring. [1]

 

In the past, these credit checks were usually limited to jobs that involved handling cash, such as working as a bank teller, or positions that involved trade secrets. Some employers believed that a person's credit could give clues as to how responsible they were with handling money or how trustworthy they were.

 

Now, however, credit checks are frequently run for any type of job, whether or not it involves cash handling. The new school of thought is that a credit check can act almost as a character reference, telling prospective employers about how responsible someone is or whether or not they make poor decisions. [2]

 

Using credit checks in the hiring process is a controversial issue. People who support the idea feel like it is no different than checking a person's references. 

 

People who oppose the idea, on the other hand, feel like it is an invasion of privacy and that credit reports don't give an accurate picture of what a person is really like or whether they are capable of handling a job. Oftentimes circumstances that are beyond their control such as the death of a spouse, the loss of a job or a divorce can cause black marks on their credit report, unfairly disqualifying them from a job that otherwise would have been a perfect fit. [1]

 

The following video outlines some of the ways that credit checks can keep people from qualifying for jobs:

 

 

References:

 

1. http://www.cnn.com/2010/LIVING/07/12/cb.employers.your.credit/
2. http://www.askamanager.org/2009/10/why-do-employers-run-credit-checks-on.html

answered Sep 1, 2015 by blueskies (57,070 points)

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