So, you’ve closed on an M&A deal and you’re going to make this new asset part of your existing organization. Diligence revealed that this addition to your business will support your strategic...Read more »
Creditworthiness: For Hire or Not for Hire?
Back in college, when professors and counselors prepared you for an interview in the “real world,” did their tips include “and be sure you’ve got a solid credit score?”
But battle lines are being drawn in 25 states over whether future employees should or should not be judged on their creditworthiness when applying.
Privacy and civil rights advocates argue that employers using credit histories to decide whether or not to hire an applicant are making an unfair value judgment. And while pulling credit reports to use judiciously in hiring for sensitive managerial or administrative positions, it’s those employers using the reports as a hiring tool to fill lower paying jobs who are facing discriminatory accusations.
For example, with the rise of the economic recession in 2009, California’s foreclosure crisis, combined with a 12.4% unemployment rate, has eroded the credit status of millions of state residents. Yet, 60% of U.S. employers conduct credit checks on job applicants, according to the Society for Human Resource Management (SHRM).
“We’ve seen candidates not get jobs because of bad credit – due to the economy or divorce – but having nothing to do with their job abilities,” said Keith Middleton, partner at Fahrenheit Finance.
“In regard to whether or not credit reports should be used in the hiring process, especially in the financial sector, we internally have the same question. Regardless of the industry, it’s a thought-provoking question for employers.”
What are your thoughts?
Does your company pull credit reports during the hiring process? Has your own credit report been pulled when applying for jobs? We want to know – leave your comments below.