Did you know that this year 60% of employers in the USA will be running checks on the credit score and/or credit history of many potential employees? It is up to each company’s discretion on which applicants need to have their credit checked, and in some cases (though not all) the applicant is applying for a job that does not handle any finances, cash flow, or assets.
For every person that authorizes one of those potential employers to check their credit score/history, 1 out of 4 people will be told that they may have the qualifications for the job but their credit score is too low to be acceptable by company standards – a little over 25% of Americans have a credit score that is considered ‘poor’. Some companies feel that you are a risk to them if you have a low credit score because you are deemed more likely to embezzle or steal from the company. Many more companies feel that your credit score is a very accurate portrayal of your ability to be responsible – that is, if you aren’t responsible enough to handle your finances well, then your irresponsibility and lack of caution may spill over into your work habits.
I’m sorry, did no one else notice that we’ve been in an economic recession since 2008? I don’t care about the happy articles out there saying there are more and more job opportunities; the vicious reality is that with the increasing number of employers checking credit scores of job candidates, more people are staying unemployed.
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A couple I know from Church had referred me to an open position at a company they thought was a perfect fit for me and vice versa. My interview was spot-on, I could see it in the interviewing manager’s face and I felt great about it. My background check went smoothly and drug testing showed I’m clean as a whistle. Then why did I not get the job? My credit score was six (SIX!) ridiculous points lower than what they deemed acceptable for employees.
I went through a divorce last year, and because I had to pay out on a little over fifteen-hundred dollars in taxes my ex-husband owed as an independent contractor, I went into debt for several months. The divorce didn’t get finalized until two months after the tax filing deadline, so we filed married but separate. That meant that taxes owed on his independent contractor job were divided between us both – he had to pay out just as much as I did. To be fair to a good man, my ex-husband struggled financially as much as I did in the aftermath of our split, if not moreso than I. That debt wasn’t something intentional, but it certainly made my life difficult beyond the emotional strains of divorce and other financial obligations that come with all the associated legalities.
I tried to get back into school a few months later, and had to max out my credit card with a $500 limit on it in order to pay for tuition. The cost of books ate away at the remainder of my paycheck. I had a loan I took out over four years prior to that time that now is nearly paid off, but it was driving me into the ground to make those monthly payments. I have been monitoring my credit score very closely for the past year and I have done everything possible to pay off all debts. I have an Excel spreadsheet with several math formulas and meticulously entered information to track my budget versus actual expenditures.
I’m not irresponsible with my money by any means. Wait, I should clarify that: I can frankly admit that I wasn’t cautious with my money prior to my twenty-first birthday (such as when I got that loan to help pay for a move out of state, or forgot to make two of the payments that first year), but I have become downright obsessively neurotic and perfectionistic about my finances over the last several years. Ask my ex-husband. Ask my best friends. Ask my co-workers (former, that is). Ask my boyfriend, bless his heart. Every last one will tell you it’s the most annoying trait I have, as I bring up my ideals of budgeting quite often in casual social settings such as baby showers, running club, Independence Day barbecues, and date nights.
Now, as I’m unemployed, not only is my financial situation dire, but my credit score is going down a point or two each time a potential employer accesses it. I have filled out a few hundred applications (I am as hard-working while unemployed as I am when gainfully employed), so with all the releases of information I’ve authorized, I’m now concerned how many times my credit score will be accessed, how many points that will cost me on the score, and how many potential job opportunities I’ll lose because of this mess. I have been out of work since last Thursday. I lose about $112 dollars for every day that I would have been working that I am now spending hunting for a new job. Thus far, I am about $672 behind. That is terrifying. Horrifying. I’d go so far as to say the sky is falling. Don’t look up.
Thank you, potential employers who are helping to ruin the very credit score you are looking up. You’ve left this woman in tears tonight over her now-seemingly useless Excel spreadsheet. I hope saline doesn’t offend any of you as much as those six points offended some.
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Check out more articles on this topic in the Washington Times, the NY Times and the ABC 7 LA news report. The discussion on this is not new, but with more and more people out of work, foreclosing on their homes, and just struggling financially overall, millions of job candidates today will have poor credit scores.
The dips in the economy since 2007 and 2008 through today have left very few unscathed. Every person out there knows someone – a relative, friend, spouse, former colleague or classmate, neighbor, or they themselves – who is unemployed or barely earning enough to live on. Poverty has always been in our midst, but it is becoming such a widespread issue that our government and those taxpayers who are still employed are going into extreme debt to support those who cannot get help from other sources. Employers should have more empathy for this and find other ways to screen people for jobs besides pulling their credit report (unless the position is in a government or financial industry, or a job with access to a lot of cash flow).
Insert your choice of questionable language here. All I’m going to say is YIKES.
Tags: applications, background check, budget, credit check, credit history, credit score, drug testing, interviews, lost job, nightmares, NY Times, reality, research, unemployment
I too feel as though I may have lost out to a few jobs due to credit checks. I had my mortgage modified and filed bankruptcy last year due to prolonged unemployment. It is a catch-22 when employers do this, and for what? In most cases you will not be handling or dealing with money. I do graphic design and marketing. I never deal with the money outside of the printing costs.
I had no idea this was even being done. Totally ridiculous. They are supposed to pay you. If anything, you should be checking their credit.