Does Bad Credit = Dishonest Employee?

More and more industries are starting to include credit checks on all their applicants as a part of their qualification process. Does bad credit mean one is more likely to steal from the company, leave or be terminated?

A colleague of mine has been struggling with this process quite a bit recently. Not because he has poor credit, but because the company he works for will not allow him to hire, much less interview anyone whose credit is below 650. There are other stipulations too;

  • no late payments on any bill in the last 30 days,
  • no bank overdrafts within the last year, and
  • need to show that they have kept a minimum balance in their checking account for the last year.

Protecting the Customer

On the company’s side, these requirements are not uncommon for any organization that has fiduciary responsibilities. They have a responsibility to handle, invest and direct their customers money with honesty and transparency. But does this mean that someone who has fell on hard times is more likely to misappropriate funds or steal from their customers?

Industries that require these checks for employment cannot take any chances on whether a person’s integrity goes beyond their financial records. There cannot be the slightest feeling of unease regarding their employees ability to handle large amounts of cash responsibly. Unfortunately, interviews and references are not a reliable enough source to determine how someone will act when handling their customers investments. It appears the only way to get any qualitative evidence is in hard numbers. If they don’t respect their own money, how can one be sure they will respect their customers’?

Consider the Economy

In the last 5 years, tens of thousands of Americans who keep perfect credit and their accounts balanced in a “normal” economy have had the rug pulled out from under them. Mass lay-offs, forced retirement, downsizing etc. So many people have lost their jobs due to circumstances out of their control. Many of them were ideal employees who were expecting to stay at their company for years. Do these types of employment screenings perpetuate hard times?

The trickiest part of this whole thing is that the quality trying to be defined is actually personality. Companies that screen applicants based on credit and the like, do so to determine the candidates level of honesty, integrity and trustworthiness. It appears credit is starting to define more than how big of a loan one can get.

So where do you stand?

Does your company or do your clients require you to provide this information from all applicants? How do you feel this affects the still wounded job market?