Recently, I came across a thread in the subreddit Personal Finance section called Irritated New Employer Wants To See my Credit Score. My Score Is Fine, But WHY?! The question, posted by user Ancythrowaway, highlighted the practice of employers taking a vested interested in the financial health of their job applicants. The user talked about how he was recently applying for a job, and, to his surprise, the employer asked to review his credit score. He was applying for a mid-level corporate position that had nothing to do with finance, insurance, or loans, but the employer still wanted to see his financial history. In short, the question posed in the thread was fascinating, and it echoed my own feeling that the ask was a bit of an invasive request. But, I had to ask myself, “Is it an invasive request?” What’s the amount of personal information that a potential employer should have access to?
When I first applied for a job out of college, I remember reading articles about what you should do if an employer asks about your financial history. Luckily, I never encountered the inquiry for myself, but I do know people who have. As a designer working in a creative industry, I related to the user’s confusion about why it would be necessary to hand over that type of information if the job didn’t have anything to do with finance. However, I can understand the argument of the would-be employer. Financial history provides valuable insight into the kind of person you are, which can be extrapolated upon and used to guess what kind of employee you might make. In today’s very competitive workforce, the more information you have about the candidate, the better. According to an article on Credit Karma, employers can use this information to check on “A history of negative public records or other derogatory marks could indicate to employers that an applicant has a record of untrustworthiness or unsavory behavior.”
While this might be useful, I do think it becomes a slippery slope of deciding what personal data is and isn’t appropriate for an employer to see. For example, someone in the comment section of the thread wondered (somewhat humorously) if employers would next ask to see the financial history of your friends to see what kind of people you surround yourself with. He linked out to an article called Facebook Patent: Your Friends Could Help You Get A Loan – Or Not.
Another commenter in the subreddit comments on this growing trend saying:
“It is becoming a common practice. I don’t know what field you are in but if you have any access to funds they want to make sure you have good credit because you are statistically less likely to steal from them or take bribes. There are studies that show if you have better credit you likely make a better employee on average.”
It’s obvious that credit scores don’t measure trustworthiness, and just because an individual might have fallen on difficult financial times doesn’t mean they will perform their job any better or worse. In situations where factors beyond our control forced our credit score to fall, it’s obvious we shouldn’t be unfairly penalized.
Another commenter describes this frustration with his own personal anecdote saying:
“My mom lost her job nearly 2 years ago, had just signed a 2-year lease on an apartment, and hasn’t been able to get a job since. I wasn’t able to float everything long-term and ended up taking out some loans that have been difficult to pay back. My credit score has taken a big hit, but in no way does that affect my ability to say stealing and corruption are wrong.”
Credit scores don’t parallel an individual’s moral judgement. However, it’s essential to try and keep them as high as possible which means #constantvigilance.
There are a few things you should know if you are applying for a job and wondering how much access a potential employer has to your financial history. An useful post on Credit.com explains the process saying, “A potential employer cannot legally pull your credit report without your permission.”
It’s a comfort to know that you ultimately have to be the one to sign a release form to allow the request to go through and documentation to be released. In short, you’ll know if this is something demanded of you, and you can say “no” if you choose.
That being said, it’s a good idea to be proactive when it comes to handling your credit score and any potential problems that could raise a red flag for employers. You want to comb through your credit report and ensure that all of the information is accurate, complete, and up-to-date before you apply for a job. (Heads up, you’re entitled to a free credit report from one of the three major bureaus every twelve months.) People don’t always check their credit reports (I didn’t when I was first looking for work), but it can’t hurt. If you do find problems on your credit report, make sure they are disputed and taken care of ASAP! You want to make sure there is nothing that could get you into unnecessary hot water regardless of whether or not you’re currently looking for work. Your credit score is one of the most important tools you can use to your advantage when applying for a loan, renting an apartment, buying a home, securing a low interest rate, etc. Treat it very carefully, tend to it often, and use your own best judgement when handling a request like this from a potential employer.
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