Why do companies check your credit history?

Credit reports contain previous addresses and employers as well. It may be a convenient way to check up on your resume. But mainly, if you handle your own money poorly, you are likely to handle theirs poorly as well.

I think it is a responsibility thing.

@snarp I heard that some people won’t hire ex-strippers and stuff like that. Do you know if that is true ? I also wondered how they knew that, if an ex stripper didn’t put it on their resume, would they know from the credit report ? Seems pretty discriminating to me

At the theater they checked mine once I became a manager. I did have access to the safe and could have walked out with 50K in cash if I wanted.

@dutchbrossis Credit reports aren’t psychic, they would have to have told someone they were a stripper. So it depends on what they put on the forms when applying for credit cards and such. If you put down “Mermaids Gentlemen’s Club” as your employer when applying for credit, then that might tip an employer off. I’m sure some employers would be put off by that, but there too many factors to say that people won’t hire strippers in general. I suppose some employers might not, but I doubt it’s in the HR handbook.

@snarp I see. You said the credit reports show past employers so that got me thinking so I decided to ask. thank you

@dutchbrossis Of course, credit reports can also be wrong. I haven’t applied for credit anywhere in a long time, so they list my employer as one I haven’t had in a long time. I really don’t know where they get all their information, they had one address for me that I can’t imagine where I listed it. It was a friend’s house, I didn’t even live there. I might have put it down when I was buying tires, but I didn’t apply for credit to buy them.

@dutchbrossis, there is nothing “wrong” with discrimination; it happens legally every day in every industry. It’s how people are hired and promoted, and why one company wins a bid when others don’t. It’s “illegal discrimination”, that is, discrimination based upon race, gender, marital status, sexual orientation and religion, physical ability or disability, for example, that are not permitted… and actionable under law.

But if you don’t think much of a person’s judgment, mental capabilities, lifestyle (apart from the aforementioned aspects of “lifestyle”), then those form perfectly valid and reasonable bases for legal discrimination.

If it weren’t for legal and rational discrimination, we’d all be CEOs… or living under bridges.

To respond directly to the question, companies check your credit history because it is a legal (and perfectly valid) way to check on things that you say in a resume. Did you work for Company XYZ for fifteen years, as you claim? Your credit history will validate—or disprove—that assertion.

Aside from that, your credit history (assuming that it is correct, and that you haven’t had any identity theft issues) is a very good mirror of “how you live your life”. Since character does matter to most employers, unless you’re plowing snow or mowing lawns for a living, your character is fairly well revealed by how you handle your own credit.

@CyanoticWasp Do you think it would be okay of an employer to discriminate against an ex stripper for what their profession used to be ?

@CyanoticWasp I have to say, that even though I said basically the same thing you did, the word “disprove” in your response makes the whole issue quite troubling. My employment has not been reported to a credit reporting agency in years. There are lots of ways credit reports can be wrong, and employment history is the most likely part to be wrong. Seems a very poor way of validating claims on a resume. I too assume that it is used that way, but I really hope it isn’t, or at least that candidates get a chance to explain discrepancies. I for one have never worried about my credit report having the right employers listed because my credit rating is generally excellent.

if your job involves some sort of security/security clearance it’s also used as one of the determinants for how much of a risk you might be to be blackmailed, bought off, or otherwise coerced into illegal activity.

depends on the company really – some some do it to see if you can manage your finances responsibly – others use it for job refrences just verfiy dates and that you did actually work were you claim you worked ( thats just a lasy way to do a p.o.v ) other may have a solution to your financial crisis but need to figure how much help you may really need – some pull your credit with out your direct permission just tp adverise financal produts available to you

@dutchbrossis, it depends on the employer and the job, I would think, as much as it depends on the ex-stripper herself. I’m not going to send a blanket condemnation—or approval—for the practice. And I certainly don’t condemn ex-strippers.

I’m not trying to make a joke here. If a former stripper applied to my company (assuming that I owned a company or managed one) and admitted to her former life while she also described how she had changed that and reformed her life (not to make any judgments about whether stripping for a living is or is not an honorable way to make a living), then I might consider her for any position at all, assuming she had all of the other qualifications for that position.

That is, I wouldn’t hire her because she was an ex-stripper, and I wouldn’t avoid her because of that, either. Rather, I’d evaluate her honesty (if she lied about the fact, then I would certainly not hire her; if she merely ‘avoided’ that part of her history, then that’s a different story) and her other qualifications for the job.

But that’s just me.

@Snarp, we all have complete responsibility for our credit histories. If there are errors, misstatements of fact, and “discrepancies”, you are not only allowed but encouraged by the credit reporting agencies to discover and correct them, or at least to “explain” them in your own words.

@CyanoticWasp Sure, but am I supposed to realistically be telling the credit bureaus everywhere I live and every job I’ve had and going through all the effort to tell them they’ve got it wrong just because a potential employer might look at it? Seems like employers shouldn’t expect the credit report to be a particularly accurate record of employment. Checking references and calling former employers would seem a better (if more time consuming) approach. Honestly, the thought never occurred to me until this thread that anyone would ever care that my report had the wrong employer or address listed. Nobody offering me credit ever has.

They’ve got a really convenient system. You can only get one look at the thing for free a year (and that only due to persistent activism to get lawmakers to force them to), they can put whatever they want in there and it affects your job opportunities, your ability to get loans, get power turned on without a deposit, get an apartment, and they’re not responsible when they get it wrong. You have to prove to them that they got something wrong to get them to change it.

your right about that unfortunelty you have to fight to corrections made some time have a atty resolve the matter – they make mistakes all the time – but ist not easy keeping track of all that data either – but its pain nontheless

@CyanoticWasp I wouldn’t use it as a reason to say you are hired. I certainly wouldn’t judge someone because they are an ex stripper. I wouldn’t even not hire them if they were still a stripper and looking for something on the side, it is a legal profession and should be treated as such in my opinion.

@dutchbrossis I agree with you that stripping is (generally speaking) a legal profession. But so is “abortion doctor”, and some of them are murdered solely on the basis of that legal occupation.

People make their own distinctions, and discriminate in their own ways. I try not to judge them on that basis too much, either—even when they make distinctions and discriminate in ways that I sometimes find abhorrent. I can only muster so much outrage in a day.

@CyanoticWasp That is true. I wouldn’t discriminate against an abortion doctor. As much as I don’t like abortions.