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#123532 - 10/20/03 01:34 PM Credit reports for job applicants
Anonymous
Unregistered

Does anyone pull the credit report prior to conducting the interview? I would like to do this because I am wasting so much time with applicants who I can't hire anyway. If I pull it prior to the interview, it may save me some time. I'm just worried that it might seem kind of "harsh" to an applicant . . . what do you think?

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Human Resources
#123533 - 10/20/03 01:56 PM Re: Credit reports for job applicants
Anonymous
Unregistered

IT IS MY UNDERSTANDING that once you have the application, signed, allowing you to verify credit, you can let it rip. It makes sense to pull it prior to an interview.

FYI: I use a to the "Persona" that does not register as an inquiry.

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#123534 - 10/20/03 03:54 PM Re: Credit reports for job applicants
Andy_Z Offline
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Joined: Oct 2000
Posts: 27,502
On the Net
Anon is referring to the authorization under 604(b)(2) of the FCRA and that does need to be in place prior to getting the report.
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#123535 - 10/20/03 08:11 PM Re: Credit reports for job applicants
RBanker Offline
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RBanker
Joined: Jul 2003
Posts: 2,675
Austin Texas
With regards to whether it seems harsh...It might be a good idea to know how an applicant handles their finances before hiring them and giving them control of a cash drawer, etc
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#123536 - 10/20/03 08:40 PM Re: Credit reports for job applicants
Bob McComas Offline
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Bob McComas
Joined: Sep 2002
Posts: 570
Dallas, Texas
You will also need to provide the applicant with a written Adverse Action Notice if your decision not to hire is based on the credit report.

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#123537 - 07/21/04 01:25 PM Re: Credit reports for job applicants
Anonymous
Unregistered

I am confused about the adverse action notice. You already answered one of my questions: you only have to provide if the non-hire decision is based upon info provided in credit report. As I understand FCRA, along with the AA you have to provide a copy of the report? I didn't think we were allowed to distribute copies.

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#123538 - 07/21/04 07:11 PM Re: Credit reports for job applicants
Anonymous
Unregistered

I know Arvest bank out of Arkansas does this. They are owned by the cousins of the founder of Wal Mart. It's a decent sized bank. I believe it's at about 7 billion.

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#123539 - 09/02/04 08:27 PM Re: Credit reports for job applicants
Anonymous
Unregistered

Before setting up an interview, we make the applicant aware that good credit is a criteria for employment with our bank. This gives them the opportunity to bail before the interview. It saves both of us time if the credit is bad. We run an Experian employer report only after a signed authorization by the applicant is obtained. We give a copy of the FCRA to the applicant at that time.

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#123540 - 09/07/04 10:02 AM Re: Credit reports for job applicants
TB Offline
Member
Joined: Aug 2004
Posts: 92
Pennsylvania
I am going to say I understand why this is done but I think its horrible to base a job interview solely on an applicants credit report! What if this person has just had some tough breaks?? Thats possible in life and the economy. If you dont have any money you may have trouble paying your bills sometimes!! I think its just terrible and I would hope that the applicant is given a fair chance to discuss this and say what happened. I know that there have been times that my credit wasnt really good in the past because of my husband losing a job or whatever and I have been in banking for over 25 years and am a good loyal employee who is a head teller and I do know how to manage a customers cash. How unfair can this is I feel.

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#123541 - 09/09/04 08:54 PM Re: Credit reports for job applicants
Anonymous
Unregistered

TB - I agree! I used to underwrite subprime loans moons ago, and came across some pretty supportive letters explaining situations I hope I am never in. I too would hope employers would give an applicant a chance to explain. Bad things can happen to good people.

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#123542 - 09/13/04 04:05 PM Re: Credit reports for job applicants
Anonymous
Unregistered

Wow! I am the original poster of almost one year ago. I had no idea this thread was still going. Since that post, I have dramatically revised my application procedures. In order to be considered an applicant, a job seeker must complete an application, which includes a separate credit report authorization form. Although this has decreased my number of applicants, the applicants that I do get are better (they are more likely to pass the credit check and meet the min quals, etc.). In conjunction w/my CEO, I developed a standard against which to apply all credit reports, so that all applicants are being treated the same.

In terms of why we pull the report to begin with, I have to admit that at first this seemed preposterous to me. But there was no way that mngmt was going to change the policy. Over the years, I have come to accept it - kind of. I wish someone would show me research that correlates a negative credit history with a pattern of theft or fraud. No one can, and until they do, I remain hesitant about doing it. But - I do what they tell me. Sorry for being long-winded.

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#123543 - 09/13/04 06:55 PM Re: Credit reports for job applicants
Anonymous
Unregistered

Rena: Would you be willing to share your tool for evaluating credit reports for employment purposes?

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#123544 - 09/13/04 08:11 PM Re: Credit reports for job applicants
Anonymous
Unregistered

Sure. Job applicants will be considered for employment when there are:
No bankruptcies in the last year. No combination of judegments, liens, and collection items in the last 2 years totaling more than $1,000 that have not been satisfied or are not being paid. No existing delinquent obligations. No more than 3 accts. that are no more than 30 days late in the past 2 years.

I'd be interested to hear the standard others use. Thanks!

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#123545 - 09/14/04 06:02 PM Re: Credit reports for job applicants
compliancegeek Offline
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Joined: Jul 2004
Posts: 129
Midwest
What do you do to meet the confidentiality requirements? Does only the HR director review and assess the credit bureau report? Or do you allow the hiring manager to review the report using the guidelines you posted? Where do you keep the report (since it can't be kept in the employee's personnel file)?

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#123546 - 09/14/04 09:51 PM Re: Credit reports for job applicants
Anonymous
Unregistered

Bankruptcy laws protect applicants from having their bankruptcy held against them in employment decisions. I would run this by an employment attorney, pronto.

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#123547 - 09/15/04 09:49 AM Re: Credit reports for job applicants
TB Offline
Member
Joined: Aug 2004
Posts: 92
Pennsylvania
Well Im sorry. I think a credit report being the criteria for hiring stinks. No possibility of getting someone with a wonderful credit report and is a lousy worker and could turn out to be a theif as well?? Also someone with a not so great credit report could turn out to be the best worker you ever had. I still say good old job history and references as well as plain old good character like they used to do in the good old days is the best way to judge a future employee, not their credit history!! I know my credit history in the past at times has been not so great and I am an excellent employee who is loyal and never stolen anything. I have worked in banking for 28 years. Good thing when I have been hired credit history was not a determining factor and I have worked at my present job for 8 years.
Last edited by TB; 09/15/04 09:52 AM.
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#123548 - 09/15/04 10:29 AM Re: Credit reports for job applicants
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,281
Quote:

Also someone with a not so great credit report could turn out to be the best worker you ever had. I still say good old job history and references as well as plain old good character like they used to do in the good old days is the best way to judge a future employee, not their credit history!! I know my credit history in the past at times has been not so great and I am an excellent employee who is loyal and never stolen anything. I have worked in banking for 28 years.




I have never worked at a bank that did NOT obtain a credit report for employment. It is viewed as a proxy for character...how you pay your bills/hold up your end of a bargain.

The banks I have worked at do provide an opportunity for explanations of bad credit and take such explanations into consideration. Job duties are weighed against the report as well.

If someone is experiencing difficulties, they are expected to advise management. Some very conservative banks at which I have worked expected lenders to let management know if they were getting divorced, because of the possible financial crunch that can create. Similarly, commercial customers getting divorced were watched more closely for possible cash flow issues. Very old school way of operating but not that uncommon.
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#123549 - 09/15/04 06:57 PM Re: Credit reports for job applicants
Anonymous
Unregistered

I am the only one who analyzes the credit report (I am the HR Coordinator and the sole HR person for my company). I keep the report in a file separate from the "personnel file". It is placed in a confidential file where I also keep I-9's and any medical info.

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#123550 - 09/16/04 03:21 PM Re: Credit reports for job applicants
redsfan Offline
Power Poster
redsfan
Joined: Dec 2000
Posts: 3,455
The Pennant Race
Quote:

Well Im sorry. I think a credit report being the criteria for hiring stinks. No possibility of getting someone with a wonderful credit report and is a lousy worker and could turn out to be a theif as well?? Also someone with a not so great credit report could turn out to be the best worker you ever had. I still say good old job history and references as well as plain old good character like they used to do in the good old days is the best way to judge a future employee, not their credit history!! I know my credit history in the past at times has been not so great and I am an excellent employee who is loyal and never stolen anything. I have worked in banking for 28 years. Good thing when I have been hired credit history was not a determining factor and I have worked at my present job for 8 years.




In a previous life, I worked for an institution that routinely pulled credit reports prior to hiring and promotion. I used to do annual training for the entire company on our Code of Ethics and Business Practices, which included a requirement regarding proper handling of financial affairs. I used to explain the need for the requirment this way:

We sell our financial management expertise to our clients. What message does is send to our clients regarding our ability to effectively manage your financial needs if we cannot manage our own finances properly?

People get into financial problems for a variety of reasons. Most people are honest and would never think of "borrowing" client funds to help them out of their financial sinkhole. But some will. While I have never thought it should be the final determinant, someone's precarious financial position makes them more likely to have a problem for no other reason than they have a reason to.
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#123551 - 09/30/04 06:35 PM Re: Credit reports for job applicants
Anonymous
Unregistered

Is it a HR rule that the credit report authorization for an applicant be a separate form than the application?

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#123552 - 09/30/04 06:53 PM Re: Credit reports for job applicants
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,618
Galveston, TX
604(b)(2) Disclosure to consumer.

(A) In general. Except as provided in subparagraph (B), a person may not procure a consumer report, or cause a consumer report to be procured, for employment purposes with respect to any consumer, unless--

(i) a clear and conspicuous disclosure has been made in writing to the consumer at any time before the report is procured or caused to be procured, in a document that consists solely of the disclosure , that a consumer report may be obtained for employment purposes; and

(ii) the consumer has authorized in writing (which authorization may be made on the document referred to in clause (i)) the procurement of the report by that person.
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