Credit reports: Job seekers hate them.
They say that a credit check has nothing to do with how they will perform on the job, especially if it does not involve handling actual cash or working with corporate finances.
But employers know exactly what they’re looking for when they use credit checks for job applicants, according to William M. Greenblatt, chief executive of Sterling Testing Systems Inc., based in New York. The global company, which he founded in 1975, provides pre-employment screening and background checking services for business.
Greenblatt, who is a labor attorney, a certified polygraphist, a licensed private investigator and specialist in security and testing, has more than 500 employees.
“Whenever you apply for any type of credit–such as student loans, car loans, mortgages, credit cards, charge accounts–you need to prove employment,” he explained. “Lending institutions verify your employment and it becomes a matter of public information.
“So credit reports show not just your financial history but also your job history. And, actually, most companies are more interested in your financial patterns than your employment background. They want to know if you pay your bills promptly. And this information gives them an idea of how the individual might be expected to behave, if hired.”
Though only 15 percent of Greenblatt’s clients ask for credit checks, his business, he says, “has grown in excess of 50 percent annually since 1997.” And while you might think that employers have become much more cautious since 9/11, the executive says that’s not the reason.
“Technology is the reason for the growth, because it has come so far,” Greenblatt explained. “We can do searches in under 5 seconds and inexpensively.”
In addition to identifying your patterns of payment, employers, he says, are most likely to do credit checks when the job applicant will be handling some aspect of finances, to verify employment history and your Social Security number.
“Companies only do credit checks when there’s a reason to do it,” said Greenblatt. “Employers have been doing credit checks for more than 20 years. Anything an employer can do before hiring to find out more about the job candidate helps them make a better hiring decision.”
I asked the expert if he agrees with job applicants who consider credit checks an invasion of privacy, comparable to lie detector tests–which have been ruled illegal for job applicants.
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“First of all, employers have to get the applicant’s permission to do a credit check,” Greenblatt said. “And if the applicant requests it, the employer has to share the information. If an applicant is denied a job because of any information on the credit check, the employer is required to inform the applicant in writing.
“This is different from lie detector tests, which are very subjective and not an exact science. Credit is a compilation of your actual actions. We live in a world of accountability. You can’t buy something and just not pay for it.”
I asked Greenblatt how his credit is. “Outstanding,” he said. “I check it annually. You need to have good credit. In addition to its being a matter of doing right or wrong, success goes to the prepared. And the more prepared you are, especially in a difficult labor market, the better advantage you have over the competition.”
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Carol Kleiman’s columns also appear in Monday’s and Tuesday’s Business sections. Hear her on WBBM-AM 780 at 6:21 p.m. and 10:22 p.m. Mondays and 11:20 a.m. Saturdays. Watch her “Career Coach” segments on CLTV. E-mail [email protected].