Employee background check and bad credit

[grassisalwaysgreener]

I am in need of some advice. In the past two weeks DH has received two job offers (in writing) however both require background checks. DH will pass any background check- never arrested, no lawsuits, no sex offender list, didnt lie on his application, etc. However he does have bad credit. We had to short sale a property that we rented out, 18 months ago. Then we had to do a loan modification on our primary home and that was completed 7 months ago. We have credit card debt (due to rental property before it was short saled) and are enrolled in a debt management program. We've paid off $15K in debt already and plan to be 100% debt free in two years. We've made some financial mistakes but have been on the right track for some time now.

I am very scared that the company DH says yes too will rescind their offer once they check his credit. We checked his credit tonight and there weren't any errors on DH's credit report (we checked all 3). Unfortunately the last reporting was in June and it doesn't show yet that in July we've paid off two credit cards and one of our cars, making us car payment free. I know by October it will be reported and his credit score will jump higher, but that doesn't do us any good right now.

Anyway, has anyone had a background check done on them with bad credit and still gotten the job? Both jobs would help financially but one in particular (DH's first choice) would allow us not only be financially comfortable, but pay off our debt in 12 months, be 100% debt free. We really really need him to get this job. What would be the best way to approach this? Mention to HR that he has bad credit and explain why (bad real estate deal)? Wait until they come back and explain? Does it help or matter that the first company is jumping through hoops to get DH to accept the offer?

I'm literally sick to my stomach with fear about this. So any advice would be helpful.

 

[Nashville]

Honestly, don't say anything. Many companies don't actually end up doing a credit check, they just say that to weed out potentially problematic people. These days, having some debt is not a reason to not get a job. If it is brought up, your husband can show paperwork from his credit counselor to show how he's taking steps to improve his credit.

There is actually a movement to get this policy changed and make it illegal for employers to factor a credit check into their employment decisions. Hopefully it will pass soon. How are people supposed to clean up their credit if they can't find a job?

 

[grassisalwaysgreener]

Honestly, don't say anything. Many companies don't actually end up doing a credit check, they just say that to weed out potentially problematic people. These days, having some debt is not a reason to not get a job. If it is brought up, your husband can show paperwork from his credit counselor to show how he's taking steps to improve his credit.

There is actually a movement to get this policy changed and make it illegal for employers to factor a credit check into their employment decisions. Hopefully it will pass soon. How are people supposed to clean up their credit if they can't find a job?

Nashville- Thank you for replying! Both companies state that employment is contingent on a successful background check. DH feels like nothing needs to be said in advance to HR about his credit report. He says he's not a felon, and that he can explain the short sale, how we got into debt (real estate gone bad) and that we're working on getting out of it, and that it's not a reflection on his work ethic, trust, or responsibility. I'm very scared both companies will do a rescind first, ask later move.

I've been googling this topic and it's scared me reading the stories of people being denied employment due to bad credit.

 

[Hest88]

I wouldn't bring it up, but if asked he can just be honest about it. They're usually more concerned with criminal activity. However, if it is something that comes up, as long as he's not defensive about it he should be able to talk through it. Everyone knows how the economy has been.

 

[grassisalwaysgreener]

I wouldn't bring it up, but if asked he can just be honest about it. They're usually more concerned with criminal activity. However, if it is something that comes up, as long as he's not defensive about it he should be able to talk through it. Everyone knows how the economy has been.

Hest88- Thank you. DH feels that I am scaring myself for no reason. He feels confident that it's not as big of an issue as I do. Both my parents tried to make me feel better, saying that with so many people with debt, short sales/ foreclosures, etc., that with the rest of his background check being clean it wouldn't be an issue. Company 'B' wants DH to start asap and plans on doing an expidited background & credit check. Company 'A' will do a standard 10 day check.

 

[omieluv]

I work in HR and recruiting. Background checks and credit checks are usually different checks and your hubby would have had to sign a waiver allowing the company to run a background check and possibly a second waiver for a credit check. Did this company say they would be performing both background and credit checks? Normally, credit checks are not standard procedure, except in certain industries involving money/finance/banking/cash handling, etc. Sometimes companies might run credit checks on "key" individuals in the company to ensure they avoid hiring people at executive or VP levels that might embezzle money. A background check will uncover any sort of infraction involving financial issues, but we are talking about breaking laws and such, not a poor credit history.

 

[iota15]

The economy is in the dumps. I'm sure they'll understand that a person who hasn't been employed in a bit (I'm assuming) has a little bit of credit trouble.

 

[grassisalwaysgreener]

I work in HR and recruiting. Background checks and credit checks are usually different checks and your hubby would have had to sign a waiver allowing the company to run a background check and possibly a second waiver for a credit check. Did this company say they would be performing both background and credit checks? Normally, credit checks are not standard procedure, except in certain industries involving money/finance/banking/cash handling, etc. Sometimes companies might run credit checks on "key" individuals in the company to ensure they avoid hiring people at executive or VP levels that might embezzle money. A background check will uncover any sort of infraction involving financial issues, but we are talking about breaking laws and such, not a poor credit history.

Omie- Thank you! On Job Offer 'A' it just says background check, on job offer 'B' it says background and credit check. DH is in software developement, no handling of finances. It is a "higher up" job (one step away from VP role). Definitely no laws broken! Just bad credit from a bad real estate decision on our part. Omie, would you suggest that DH not say anything? Or tell HR that when they pull his credit report it'll show not great credit?

 

[grassisalwaysgreener]

The economy is in the dumps. I'm sure they'll understand that a person who hasn't been employed in a bit (I'm assuming) has a little bit of credit trouble.

Iota- Thank you! That's what my parents said as well. Fortunately, DH has always been employed, our bad credit stems from a bad real estate decision. Things are great now, but our credit took a big hit.

 

[monarch64]

I was hired with compromised credit two years ago. I work with insurance and securities, and I had my credit checked twice--once in the beginning of the hiring process and once again by home office. I was on a 6 month probationary period, after which they checked my credit again to make sure it hadn't worsened. So yes, it is possible to be hired after a credit check reveals that you don't have a spotless history.

That said, I was as up front as possible about my situation, and it sounds like your DH's poor credit isn't due to irresponsibility so it may behoove him to voice his concerns now rather than find out later that his offer was rescinded because what looks bad on paper doesn't reflect the situation that actually happened.

I have been asked in the past, when going through the hiring process, whether I would like to discuss anything that might show up on my credit report. Back then I couldn't figure out why they would even ask that, since I always had perfect credit up until 2.5 years ago! Now I understand that they were giving me a chance to discuss anything that might look bad and explain the circumstances surrounding it.

 

[grassisalwaysgreener]

I was hired with compromised credit two years ago. I work with insurance and securities, and I had my credit checked twice--once in the beginning of the hiring process and once again by home office. I was on a 6 month probationary period, after which they checked my credit again to make sure it hadn't worsened. So yes, it is possible to be hired after a credit check reveals that you don't have a spotless history.

That said, I was as up front as possible about my situation, and it sounds like your DH's poor credit isn't due to irresponsibility so it may behoove him to voice his concerns now rather than find out later that his offer was rescinded because what looks bad on paper doesn't reflect the situation that actually happened.

I have been asked in the past, when going through the hiring process, whether I would like to discuss anything that might show up on my credit report. Back then I couldn't figure out why they would even ask that, since I always had perfect credit up until 2.5 years ago! Now I understand that they were giving me a chance to discuss anything that might look bad and explain the circumstances surrounding it.

Monnie- Thank you! So reassuring to hear that you were still offered the job. I spoke to DH this morning (he's on a business trip) and he's decided to speak to HR about the credit check. He's going to be upfront that his credit is less than stellar right now, but that we're on the road to recovery, it was a bad real estate deal, etc. So if/when they check his credit she won't be surprised. Also, the VP of company 'B' called DH this morning and he asked about the background check (without going into the credit issue). The VP told him that it's more to just to confirm what he put on his resume, no felonies, etc. The VP also said they may not even do either a background check or credit check, it's just a possiblity!

 

[omieluv]

Only disclose credit information to the employer that will be running the credit check. This way, they will know he is being honest and will take that into consideration during the interview process.

 

[grassisalwaysgreener]

Only disclose credit information to the employer that will be running the credit check. This way, they will know he is being honest and will take that into consideration during the interview process.

Omie- DH will be speaking to the HR person with the company he's planning on signing on with. Correct me if I'm wrong, but it's my understanding that HR will not go to anyone else within the company with this information? Or will they go to the CEO (who is pulling out all the stops to hire DH) with DH's credit report? DH will pass the background check with flying colors. It's the credit check we're worried about.

 

[omieluv]

Only disclose credit information to the employer that will be running the credit check. This way, they will know he is being honest and will take that into consideration during the interview process.

Omie- DH will be speaking to the HR person with the company he's planning on signing on with. Correct me if I'm wrong, but it's my understanding that HR will not go to anyone else within the company with this information? Or will they go to the CEO (who is pulling out all the stops to hire DH) with DH's credit report? DH will pass the background check with flying colors. It's the credit check we're worried about.

The degree to which HR can share will depend on the company's data privacy policy for its current employees. With that said, your DH is not a current employee, so HR can discuss his history with key individuals involved in the hiring decision. HR will review the credit check and decide if it is necessary to share results with the CEO. If HR is not concerned with what they see, then nothing will be shared. If something comes back that will disqualify your DH from the role, HR will have to make key people in the process aware that your DH did not pass the credit check. If a something comes up on his credit check that falls into a "fuzzy" area, HR will likely discuss the issue with key people in the process.

Does your DH have a copy of the credit check release form? If so, review the fine print, as it might go into greater detail regarding the degree to which credit information is shared within the organization.

 

[Amber St. Clare]

no advice, I'm just wishing you both the best of luck!

 

[Lady_Disdain]

In some companies, HR will just issue a hire/not hire recommendation, without giving specifics about the credit check (or, at the most, say that the credit check was not satisfactory). In others, HR may give a summary of the check to the potential boss. In either case, in my experience, bad credit per se is not a problem but a bad record (aka, multiple bankrupcies and other evidences of a pattern; not one bad real estate deal) may be.

Either way, I think your DH should call the CEO and warn him that his credit isn't so good because of the rental property and that it might come up in his credit check. This way, the CEO won't be surprised by anything HR brings in and can have an answer ready. Big bosses don't usually like surprises!

Best of luck!

 

[grassisalwaysgreener]

Only disclose credit information to the employer that will be running the credit check. This way, they will know he is being honest and will take that into consideration during the interview process.

Omie- DH will be speaking to the HR person with the company he's planning on signing on with. Correct me if I'm wrong, but it's my understanding that HR will not go to anyone else within the company with this information? Or will they go to the CEO (who is pulling out all the stops to hire DH) with DH's credit report? DH will pass the background check with flying colors. It's the credit check we're worried about.

The degree to which HR can share will depend on the company's data privacy policy for its current employees. With that said, your DH is not a current employee, so HR can discuss his history with key individuals involved in the hiring decision. HR will review the credit check and decide if it is necessary to share results with the CEO. If HR is not concerned with what they see, then nothing will be shared. If something comes back that will disqualify your DH from the role, HR will have to make key people in the process aware that your DH did not pass the credit check. If a something comes up on his credit check that falls into a "fuzzy" area, HR will likely discuss the issue with key people in the process.

Does your DH have a copy of the credit check release form? If so, review the fine print, as it might go into greater detail regarding the degree to which credit information is shared within the organization.

Omie- thank you again. DH spoke to HR at the company he wants to say yes too, and she said that she has to speak to the legal department, but that in this day and age with how the economy has been, she doesn't think it's going to be an issue. But I have a bad feeling that I can't shake, that the offer will be taken away. Maybe I'm assuming worst case. DH still feels it's not an issue though. We'll know later today what legal says. She also told DH that she wouldn't be disclosing anything to the CEO. Ugh.

DH hasn't signed anything, even the offer letter yet. I don't think he has been given an copy of the background and credit check just yet.

 

[grassisalwaysgreener]

no advice, I'm just wishing you both the best of luck!

Thank you Amber!!

 

[grassisalwaysgreener]

In some companies, HR will just issue a hire/not hire recommendation, without giving specifics about the credit check (or, at the most, say that the credit check was not satisfactory). In others, HR may give a summary of the check to the potential boss. In either case, in my experience, bad credit per se is not a problem but a bad record (aka, multiple bankrupcies and other evidences of a pattern; not one bad real estate deal) may be.

Either way, I think your DH should call the CEO and warn him that his credit isn't so good because of the rental property and that it might come up in his credit check. This way, the CEO won't be surprised by anything HR brings in and can have an answer ready. Big bosses don't usually like surprises!

Best of luck!

Lady Disdain- Thank you! I'm not sure if DH will want to go to the CEO just yet. Definitely no bankruptcies at all, just a short sale, multiple credit cards with high limits that are in a debt management program for the last 13 months ($15K paid off, and we just paid off our last car loan, two credit cards paid off in July), and a loan modification on our current property that was completed 7 months ago. No felonies, no fraud, no bankruptcies, etc. Just bad credit that is being repaired due to a bad real estate decision.

 

[Gypsy]

Do. NOT. Bring it up.

Unless he is in finance/securities/investment/insurance or government contracting/anything that needs top secret type clearance they likely won't even check his credit. And if they do... the probably won't care.

Also, it is very unlikely that his background check will include a credit check UNLESS it specifically says so when he is doing the forms for it. I've had both types. Ones where there is no credit check (most often) and types where there is, and the credit check ones ALWAYS get a second consent form specific to that. So your husband will know in advance if they are running one. IF they are running one, THEN he can mitigate as per Lady Disdain's advice. BUT the likely will NOT run one, so DO NOT VOLUNTEER INFORMATION.

Trust me. I have had terrible credit (scores in the 400s, student loan debt in the hundred thousands, and in default on those loans to boot). And have changed jobs with ZERO issues in the past. Not even a peep on the background checks, even the ones that ran credit checks.

It really depends on the employer and the job.

ETA: Please make sure to note that Monarch's experience was due to her type of job: Finance/Security/Insurance. I am in tech/healthcare/law and it is NEVER been an issue.

 

[OoohShiny]

Do. NOT. Bring it up.

Unless he is in finance/securities/investment/insurance or government contracting/anything that needs top secret type clearance they likely won't even check his credit. And if they do... the probably won't care.

Also, it is very unlikely that his background check will include a credit check UNLESS it specifically says so when he is doing the forms for it. I've had both types. Ones where there is no credit check (most often) and types where there is, and the credit check ones ALWAYS get a second consent form specific to that. So your husband will know in advance if they are running one. IF they are running one, THEN he can mitigate as per Lady Disdain's advice. BUT the likely will NOT run one, so DO NOT VOLUNTEER INFORMATION.

Trust me. I have had terrible credit (scores in the 400s, student loan debt in the hundred thousands, and in default on those loans to boot). And have changed jobs with ZERO issues in the past. Not even a peep on the background checks, even the ones that ran credit checks.

It really depends on the employer and the job.

ETA: Please make sure to note that Monarch's experience was due to her type of job: Finance/Security/Insurance. I am in tech/healthcare/law and it is NEVER been an issue.

I honestly don't know how US citizens cope - having to pay $$$$$$ for a decent education that will give them a chance to have a career that pays at least reasonably well

Over here, in the UK, student fees have only been in place for under 10 years, and they are (currently...) capped at £9k ($14k-ish) a year for a university degree - which still potentially means walking out of uni with £30k/$50k of debt, which is madness really.

 

[chrono]

Ummmm, I'm not sure why a 4 year old thread is revived.

 

[Ella]

Ummmm, I'm not sure why a 4 year old thread is revived.

Spammer, sorry!