I thought Dawn banned you.

But I agree with your thoughts. Your credit report says a lot about how responsible you are. I wouldn't hire someone to work for me who screwed up their credit history. If they can't handle their personal life, why should I expect them to handle the job I'm offering?

She did, which is why I commented here, instead of over there.

I don't necessarily disagree with you, but at what point does an employer's right to know become an invasion a potential employee's privacy? There needs to be a line in the sand, for lack of a better analogy, beyond which a person knows that a potential employer cannot cross. Just because a company is considering hiring me, that does not mean my life should be an open book. Drug testing? Background checks? Credit reports? What's next- blood tests? genetic testing? Political and religious litmus tests?

You raise some interesting points, but I would still land on the side of privacy. There is no reason why a potential employer should have to know how many payments I have left on my truck.

Why did Dawn ban you?

I only ask because I've been banned with little cause by a "respectable" blogger and I'm always interested in what causes such drastic measures to be taken.

Jack,

As a libertarian, I'm all for privacy. However, I recognize the right to work for both employees and employers. Just like you can refuse to work for a company, they can refuse to hire you unless you reveal certain information.

Nobody is forced to apply for a job. When you apply for a job, and the employer presents you with conditions like drug testing, credit checks, or whatever, applicants need to make a choice. They can submit to the tests, or apply someplace else. After all, when employers go 'too far', their pool of applicants will suffer, and they will in turn suffer in a competitive marketplace.

For instance, lets say McDonalds starts requiring DNA samples, drug tests, credit checks, and security checks just to get someone to flip burgers. The best burger flippers will probably apply to Burger King and Wendy's, rather than waste their time with McDonalds. In order to remain competitive with BK, McDonalds would have to start being less picky, or face financial ruin.

Kinda hard to rebuild credit if someone doesn't hire you.

It's a great catch-22 and a great way to discriminate, if you ask me.

Owen,

To make a long story short, she claimed that I was personally attacking her, when I pointed out her hypocrisy on a certain issue.

She banned my IP when she was on her old webhost, so technically, I can comment on her site. (like she could stop me with a simple IP ban any way) Still, I consider the ban to still be there in spirit, so my commenting (and reading) of her site are very, very infrequent. I do go over there every now and then, but mostly only when I read something about her on a third party site.

I figure why patronize a place when I'm clearly not wanted.

Besides, I don't want to be relegated to 'troll' status. She has enough trouble with those guys already.

Goddess,

Thems the breaks. Its also hard to get loans and credit cards when you have poor credit.

What it comes down to, is that you are asking someone to take a risk. Arguably, whenever a company hires someone, they take a risk. They risk that they won't get value for the dollar they pay for that employee's services. That risk increases when you hire someone with questionable credit.

Some companies are willing to take more risk and hire people without checking their references thoroughly. Other companies are very risk averse, and turn over every stone prior to hiring someone.

Dawn Olsen actually said it best when she said she'd never work for a company that requires credit checks. That is the pitfall of such a requirement. Already, they've limited their talent pool, and it may cost them more money in the long run.

Such is life. There are plenty of other jobs out there.

I guess that somewhere in the middle, is a range where a company can weed out the losers that are going to steal their computer and raid the company of assets, without scaring away good talent that may have had a little lapse in their credit-worthiness.

Its bigotry masquerading as analysis. Bigotry of is self-reinforcing once established: no one comments when a person with a good credit history steals, and no one comments when a person with bad credit history doesn't steal.

The existance of 'horror stories' proves exactly nothing. I've read a lot of horror stories about lawyers on overlawyered.com. Do I therefore screen out all canidates with a background in law, so as to avoid hiring an unscrupulous bastard? Or might I need to prove a strong correlation first?

I could probably 'prove' that people who are divorced are marginally less likely to get along with coworkers. So would it be ok to start weeding out those people? Or you all for privacy violations as long is it isn't your ox getting gored?

What of these things could not be found out better by simply asking the person's last employer (or co-worker), or consulting law enforcement records?

And if a better way exists to find out weather someone is a thief or lazy, then what do we REALLY have here?

Hint: Hiring is a process of elimination. You start with a stack of resumes or applications, and reduce it to a manageable number. Any method that is allowed by your legal department, approved by the HR department, and quickly eliminates possibles from your stack is welcomed.

So we have a universal way of cutting down HR's workload... but the cost is that bad credit is punished way the hell out of proportion of any sane estimate of risk.

Again, there are a lot of ways to do this. I could cut out smokers for example, since nonsmokers tend to take less breaks and tend to have less health problems that drain the complany health plan. But wait! We can go after fat people, drinkers, and so on!

Want a job? Quit smoking. They don't HAVE to hire you, you know.

What I am trying to impress on you is that given that there are alternatives to credit checks, credit checks turn into an abitrary requirement that ends up having little to do with sensible risk analysis (which I would actually agree with, were it done right).

Ryan,

I wouldn't blame you for weeding out anyone with a background in the legal profession.

What it comes down to is that people have the right to hire and fire whomever they want to do the job. The only exceptions are those characteristics that are protected by law. (race, religion, etc.)

If you are going to hire someone to clean your pool, and you say, "I only want to hire Harvard graduates", that is your choice. You are probably going to get a rotten pool cleaning and pay through the nose for it, but who am I to complain. If I'm a Yale graduate standing there with good references from the Olympic Pool Cleaning Committee, that is just my tough luck. I need to look for other pools to clean, because you aren't hiring Yale graduates.

Tough titty on me.

Freedom of association (which I wholeheartedly support) doesn't always apply to corporations, Ravenwood.

And the fact that certain types of discrimination is forbidden by law does NOT mean that every other form of discrimination is automatically OK.

And an important distincion here is that your analysis (I can go get another job) fails utterly once a certain threshhold of employers is reached.

I'm certain that there are a couple of folks down south (or up north) that "don't hire niggers" and get away with it. That's not a socially signifigant problem since there are plenty of other jobs, and it is the employer who will suffer more from a reduced potential labor pool.

But during the Jim Crow era, there was a LARGE amount of employers who practiced racist hiring. Now, it doesn't matter if you don't hire blacks because neither does your competition. And the black man can't simply 'go somewhere else', unless its a menial job.

"Go work somewhere else" only works if a signifigant amount of somewhere elses don't act in a similar manner.

So tell me, when was the last time YOU saw an employer that wouldn't throw your application away if you refused to disclose? Hmm?

The idea that requiring a credit check is analogous to wide-spread racial prejudice doesn't hold water. First of all, turning someone down because they are black and turning someone down because they cannot manage their finances are completely different animals.

First, someone who is credit challenged is probably that way due to some fault of their own. As much as they claim "It's not my fault", it is almost always, at least partially, their fault.

Second, credit reports can be repaired. Through hard work and diligence, a person who is a bad credit risk can rebuild their file with the credit bureaus. That is completely different than a black person trying to overcome racial prejudice.

Third, it is entirely legitimate to hold the belief that a person with a prior history of mismanaging finances, shouldn't be trusted to manage your assets and add value to your company. This was illustrated recently with the Arthur Andersen debacle. AA mis-handled Enron's auditing, and what happened? Other firms dropped them as an auditor. Was it justified? What about those that dropped Arthur Andersen, even though Andersen wasn't directly handling their finances or auditing? Were they unjust?

You cannot compare that with rejecting someone on the basis of their skin color. First, a person cannot help what skin color they are, and second, it has nothing to do with their ability to add value to your company. Arguably, a credit report does.

Yes, I can indeed compare the two. Every single one of the differences you point out depends entirely on how strongly credit checks correlate towards legitimate employer concerns like employee theft and other behavior.

Which is of course what seperates mindless bigotry from reasoned analysis in the first place, and EXACTLY where the argument should take place if you are to avoid a ethical monstrosity. I'm pleased that you seem to agree.

Now, keeping in mind that there are other, less invasive ways to get the same info, I want you to submit some form of evidence that credit rating strongly correlates with any legitimate employer concern.

Moreover, this evidence should ideally prove that credit rating is a better indicator of your chosen concern than calling a previous employer would be.

You don't necessarily have to pull a study out of your hat, but I'd like some indication that your bad credit=bad employee meme has some basis rather than guesstimating and ancedotes.

I liken a credit check to your college grades. Your grade in Freshman English probably isn't a good indicator of whether or not you are going to make a good employee, but some employers still want to see it. Maintaining a good credit rating requires work, just like good grades do. You need to make sure all your bills are paid on time, you don't overextend yourself, and that any problems are handled quickly and efficiently.

I wouldn't imagine any employer would look at a credit check as a sole criteria for hiring. It is merely a tool on which to evaluate applicants. The hiring process *should* include the resume, experience, work history and results, personal and professional references. If you want to go the extra mile, you take into account their credit check, college grades, and perhaps even high school grades. As an employer the criteria are yours to set and weight accordingly.

An applicant with a good resume, references, and experience isn't likely to be turned down for a few late payments. IF they are, why would you want to work for that company any way?

As for 'evidence', I don't really trust studies. More so, I don't trust the people that conduct studies. My gut feeling tells me to look more at who conducts the study, than what the study is telling you. Especially when the source has vested interests in the results.

That said, here are some tidbits offered up by an HR firm. (remember what I said about the source, and vested interests)
As is evidenced by the following statistics, the loss and liability risks to businesses that fail to conduct background checks has never been greater:

+ In a sample study of 300,000 background checks conducted by U.S.A. Fact, the company found: 5% of applicants had criminal records; 36% had motor vehicle violations; prior employment was unverifiable for 18%; and education could not be verified for 11%.
+ 30% of business failures are due to poor hiring practices (Department of Commerce).
+ 2.2 million workers are physically attacked on the job each year; 6.3 million are threatened with violence (National Institute for Occupational Health & Safety).
+ Replacing an employee costs an average of one and a half times the annual salary of the position (Rutgers University).

I don't trust statistics much either, but if you are talking about risk and about correlations, you can't realistically avoid dealing with them.

I see what you have provided, and I appreciate that you went through the trouble... but where is the part that even mentions credit checks, much less states that they are useful? I did a search of the site and the ONLY mention of credit checks is to mention that they sell them.

Again, this kind of info is really hard to get, so you don't have to come up with a concrete reference right away... but I stand by my statement that unless the correlation is there, and statistically sigifigant (at the very least!), then bad credit=bad employee is simple bigotry, excepting the case of employees who are to handle signifigant amounts of money.

I think you mean to say prejudice rather than bigotry. Still, I see your point.

I disagree, however. I see a persons credit rating as a reflection of their personal habits. The inference that a person with bad personal credit habits may continue some of those habits when they work for you, is clear.

I can see how you would believe that, and I actually agree that the inference sounds plausible. I'm with you up to that point.

I simply believe that sounding plausible isn't enough to justify widespread discrimination. Dammit, if you plan on making a section of the population signifigantly less employable don't you have SOME kind of duty to demonstrate that it is justified?

Actually, economics dictate most of it. Remember back in 1998-1999, when the U.S. had ultra-low employment. Not only could employers not be very picky, but they were throwing stock options, BMWs, and signing bonuses at candidates to try to attract talent.

Now, when there is a bit more unemployment, employers have the freedom to be a bit more picky about who they hire.

These are all assumptions. I have an employee who, when hired, had bad credit and a bankruptcy. Well, guess what? He is my star and most productive. He carries more of a workload than any other three employees put together. Damn glad I hired him before reading these disturbingly inaccurate posts.

FYI-I am degreed (BA Communication Arts, Magna cum Laude, May, 1998), and have done quite well for myself in terms of my career. I am highly regarded in my profession and have received a number of promotions based on merit, excellence and dependability. As it happens, my credit rating is very poor, based on past utility payments, charge-offs, etc. I am an exception to the ridiculous assumption that my poor credit rating has any reflection on my work ethics. The two are unparallel. I am paid to perform a service by my employer. How I spend my earned income is none of my current or prospective employer's business....A criminal background check would be the more appropriate measure of whether a candidate is a thief.

I hate to be the one to say it Nikita, but being "dependable" means that you pay your debts on time. You may have a certificate from someone that says your employee of the year and dependable, but your credit report showing charge-offs and late payments is a better gauge.