CREDIT CHECKS OUTCOMES SHOULDN’T BE SOLE HIRING CRITERIA
After nearly 35 years in the pre-employment and reference checking business, I must admit that I continue to be amazed at the number of employers who still rely on nothing more than a credit check when making hiring decisions.
The only thing I’ve been able to conclude is that doing a credit check is about the quickest, cheapest, and easiest way to screen applicants for employment – on the basis of their credit worthiness. I’ve never seen much of a connection, however, between a prospective employee’s credit history and his ability to perform the tasks a job requires!
The only time a credit check makes any sense at all to me is if the job has some financial responsibility associated with it or the job will give the candidate access to the company cash drawer. If the job to be filled has nothing to do with money or finance, finding out if an applicant pays his bills on time seems totally irrelevant to me. A background check or a reference report will provide employers so much more job performance information than a credit check can possibly provide.
One other explanation why so many employers may still rely on just a simple credit check is the belief that it will protect them if something should go wrong; in the event that happens, the employer can claim a check was done before the hiring decision was made – or so they may believe. But there are so many other factors that should be considered before making a hiring decision; it seems foolish to think that liability can be avoided by having done a credit check! Let’s say, for instance, an employee has a past history of workplace violence that could have been uncovered by doing a court check or by checking references. Now, let’s suppose the employee does the same thing again. A credit check will probably not shield the employer from liability because it will be argued that, “the employer knew or should have known” about the employee’s history of workplace violence. A credit check alone will not demonstrate, in other words, that “reasonable care” was used in the hiring process.
It’s also important for employers to understand that all sorts of unintended things can happen that will damage an otherwise outstanding candidate’s credit history – identity theft, an overdue bill that’s simply lost of misplaced, or any of a hundred other things. That’s why just doing a credit check is a poor way to screen applicants for employment.
Frankly, if an applicant’s credit worthiness or credit history has nothing at all to do with requirements of the job, it’s not worth much as a predictor of future job performance.