Human Resources Blog - Spark Hire

How Do I Video Interview…Job Seekers With a Bad Credit Score?

Every candidate comes with their own set of unique interviewing challenges. That’s why we’re tackling how to video interview different types of job seekers with this how to series. Today, we’ll be talking about how to deal with a candidate who impresses in the video interview but has a far less impressive credit score.

You’ve connected with a talented job seeker in the video interview, and so far they’ve really impressed you with their smarts and qualifications. Things are looking good and you’re already counting down the days until you can fill your open position. Before you pop the cork on your hiring champagne bottle, however, you do a credit score check. 

Diving into a candidate’s credit history isn’t simple, and depending on the job and your home state, it might even be illegal (more details below). But in this case, let’s say you have the all-clear to check out your ace candidate’s credit score. Unfortunately, the news isn’t good: your superstar job seeker isn’t such a superstar when it comes to their own personal finances.

If you’re doing a credit check before inviting a job seeker to sign on the dotted line, you’re certainly not alone. According to the Society for Human Resource Management, six out of ten private employers check credit scores for at least some of their candidates before hiring. A further 13 percent check credit scores on every job seeker proceeding through the hiring process.

Why Check a Candidate’s Credit Score?
Why do employers look at a candidate’s credit score before making a final hiring decision? Most employers evaluate credit scores for candidates applying for positions dealing directly with finances. If you’re looking for someone to manage the money at your company, it only makes sense to ensure they can manage their own personal finances.

Employers also deploy credit checks when hiring executive-level candidates. These individuals can make a big impact on your company and will likely be dealing with your organization’s finances. You want to make sure they are responsible in their own monetary life.

A credit check won’t be practical for every candidate, but for certain positions, it can certainly provide you with needed information on the candidate’s skills managing money.

What’s a ‘Bad’ Credit Score?
If you don’t often use credit checks as part of your everyday hiring process, you might be confused as to what a ‘good’ or ‘bad’ credit score looks like. Perhaps the easiest way to evaluate is to understand when you should start to worry about a job seeker’s credit score.

You should take notice of any score below a 700. If the score is below a 650, this should serve as a warning and cause some real reservations. If the score is below a 600, this isn’t a good sign for the candidate’s ability to manage their personal finances.

How Do You Stay Compliant?
Just like trying to avoid discrimination in the hiring process, employing a credit check should be done mindfully. Under the Fair Credit Reporting Act (FCRA), employers have to gain permission from the job seeker before conducting a credit check or background check. This means you need your job seeker’s permission before wading into their credit history. You also have to report what credit reporting agency was used and if you turn down the candidate thanks to a poor score, this must also be reported.

And you should be sure you know the guidelines of your specific state. Some states have implemented laws to stop employers from running credit checks unless completely necessary for the position. The latest to put a law in place is California, which joins Washington, Oregon, Hawaii, Illinois, Maryland, and Connecticut. Before asking for a credit check, make sure you know the laws in your individual state in order to stay compliant.

Does the Credit Score Matter?
Before looking into the individual hiring laws of your state, there’s an important question you need to ask yourself: Does the job seeker’s credit score really matter?

If the candidate impressed you in the video interview and has all the right qualifications for the job, how important is the credit score in determining organizational fit? If your job is finance-related, the credit score can tell you about the candidate’s relevant skills. If not, though, ask yourself what insight a credit check will really impart.

The economic downturn has hit a lot of people hard. Even those with stellar credit scores are now suffering as workers are laid off from jobs and bills start to pile up. These could very well be the job seekers who need your job the most, and the very same candidates who will make the most motivated employees.

If the credit score truly doesn’t impact job performance, perhaps it’s time you relied on other hiring metrics to ensure you find the best person. If the candidate impressed in the video interview, perhaps their credit history is less important than their excitement for the job.

A candidate with a bad credit score who fits into your company culture and believes in your company mission will be a better worker than a dispassionate candidate with a stellar credit history.

What are some reasons you use or don’t use credit scores when hiring? Share in the comments!

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Heather Huhman

Heather R. Huhman is the Career & Recruiting Advisor for Spark Hire. She writes career and recruiting advice for numerous outlets, and is the author of Lies, Damned Lies & Internships: The Truth About Getting from Classroom to Cubicle (2011), and #ENTRYLEVELtweet: Taking Your Career from Classroom to Cubicle (2010).