The Long Shadow of Bad Credit in a Job Search

Most people who have bad credit were unlucky. They had unexpected losses of income or medical problems that their insurers wouldn't cover. However, most people would agree that it's OK for someone to be denied a house loan or credit card because of bad luck in the past. Loans aren't rights. They aren't necessities for living. If you can't get a mortgage, rent. It sucks to have your housing choices thus limited, but it's not exactly a life-wrecking catastrophe.

Jobs are different. Society has agreed, repeatedly, that bad luck shouldn't make a person unemployable; that everyone has the right to seek appropriate work. We make black-listing illegal and non-compete agreements non-enforceable (if they preclude employment outright as opposed to actual bad-faith competition) for that reason.

The problem is that there are a lot of companies that don't want to play by these rules. They really want to be like the comic-strip boss who throws two-thirds of the resumes in the trash and says, "I don't want to work with unlucky people".

What I think people should do, personally, if they meet onerous follow-on request is to fake time pressure (or use real time pressure if it exists). "I have a Friday deadline on an offer, and won't be able to turn it down unless I have an offer letter from you."

If the offer letter says, "contingent on <X>" where X is something onerous (like a credit check for a non-finance job) then you may want to ask what you get if you don't get the offer, negotiate until it's acceptable (again with the time pressure) and get that in writing.

Maybe, in our mutually tarnished futures, the collective conscience of employers will see the absurdity of holding something against someone from 10+ years ago.

In your case the credit score worked as intended because the "bank of daddy" will also likely be there in the future. You may have an unfair advantage, but that advantage is you were born with money; the fact that your credit score is higher is just a direct result of this.

edit: I should make it clear that I'm not talking about using credit scores for employment, which I think is absolutely discriminatory and misguided from the employer's perspective.

For employers the situation is more complicated, and legal considerations rule the day. Companies can and do get sued for discriminating against individuals who exhibit low-class behaviors or appearances. Credit scores are a clean, legal, objective way of weeding out a lot of the same people.

Also, if an employee with a troubled history (especially a criminal record) messes up in a way that results in litigation, the employer can face accusations of negligence for putting him in a position where he can do harm. Proper screening helps the employer make a case that all necessary due diligence was performed.

Even if we all agree the practice is malodorous, without public discussion of it, we are apt as individuals to concede to it as we believe we have no alternatives.

It's similar to the puzzle interviews which are controversial and many people here dislike. By talking about it, by raising it and discussing again and again their negatives, it helps raise awareness of strategies on how to avoid them, what to do when one is encountered, and can even raise awareness in people that do like them as to why they are problematic and encourage them to find alternatives within their company.

FWIW, I think credit pulls are obnoxious, and even so, yes, I have been asked to consent to them as well as background checks for jobs which should not need them at any time.

And it's Saturday.

A large part of HN is about finding (or creating) employment.

That said, I believe employers are well within their rights to run credit checks on their employees. Granted, it might not be useful, but nobody's forcing anyone to apply to a job, either.

[1] http://ycombinator.com/newsguidelines.html

I would if the evidence suggested that a credit report was a good indicator of the risk of the candidate committing an offence, and that the candidate is applying for a position where they have the ability to do such.

I suspect that the probability of either event is small, and that it's worthless and discriminatory. My major concern is that the practice turns into a catch-22--you need a job to get out of debt, but you can't get a job with debt.

I worked at a major financial institution where a pre-requisite was drug, credit, and background testing (even running fingerprints) for everyone. The whole thing seemed a big waste of time.

That's not the pertinent question. Since it's already happening, the trend can only be reversed through confrontation, and confrontation only happens if people think that pulling credit reports is an unreasonable thing to do (as opposed to not having an opinion on the practice). Otherwise people are inclined to say nothing if it so happens that they have the ear of someone responsible for making the decision (or are such a person).

The default position propagates the bad practice, making it vitally important to force people to choose one side or the other before they unwittingly endorse the status quo.

Ok, I'll be that guy. The risk is that an employee with bad credit might be more likely to steal or take bribes, and you acknowledge that this is a potential risk for some employees (e.g., comptroller of NASDAQ).

Why do you believe it is a risk that the comptroller of NASDAQ might embezzle, but not a risk that a guy selling $2,000 shoes might swipe a few $100 bills from the register?

I have had a few clients request my credit reports to do assessments. Do consulting companies typically bend over for those? I declined, but it was pretty clear that most or all consultants they talked to in the past agreed to it, and I was the exception.

For what it's worth, this client had nothing to do with finance or national security, and there would be no PII involved. Amusingly, the largest of clients I've worked with and the most sensitive information and IP I've handled never involved anything beyond an NDA.

Maybe not for a shoe salesman, but for something technical, sure. Maybe not for some crappy social game, but for a platform, or anything touching finance, or anything security related (other than purely exploit development on public code).

I think what you're seeing is the effect of credit monitoring agencies marketing departments.

Sure over the long term those companies that discriminate based on credit may lose out, but in the short term HR managers are going on the word of Equifax/Transunion/Experian that checking new hire's credit history is beneficial.

The history of business is full of stupid trends that aren't supported by the evidence.

How do you establish an employer didn't hire you because an HR person saw your credit report and didn't like it?

[1] http://en.wikipedia.org/wiki/Big_Five_personality_traits

I don't actually know whether bad credit is predictive for job performance, though the story for why it might be is easy to imagine.

Most people have problems at some point in their lives that impact their ability to concentrate on their work. An employee could be going through a divorce or other relationship break-up, or have health problems or have family members with health problems. Are employers going to try to dig up this kind of information about potential employees as well? Where does society draw the line?

For that matter, I imagine that many employees who have financial problems would make an extra effort to succeed at work, since they really need the income.