Credit check, can they withdraw offer?
Have you ever heard about circumstances where the offer was withdrawn based on decline credit check once you already started working and the check was completed after your start day? Say you defaulted on a small amount on a credit card when you were a student, repaid this etc but its still showing on your credit report from this time and may affect in decline.
Thanks
Bad Credit on my employment background check
A credit check can be part of the background check. Minor credit infractions or small amounts of delinquent debts are not an issue. However, large amounts of unsecured debt can pose a problem for a job applicant.
Companies can and have in the past associated bad debt with a poor work ethic or sense of responsibility. It is possible is possible to be barred from a position for very poor credit but it is not common.
Key Takeaways
- It is possible to get turned down for very bad credit. However, it is not common.
from certified user @Marcus_Halberstram"
The only reason they conduct a credit check is because of concerns arising from if you're currently in bankruptcy. If you are in personal bankruptcy, there are a host of legal issues surrounding this.
The process to get any competitive job is faar more stringent and they therefore don't have to rely on these types of completely stupid metrics that don't necessarily bear a strong correlation to job performance, dependability or intellectual aptitude.
Recommended Reading
Ok... maybe we can answer credit check concerns once and for all.
Your potential employer doesn't give a shit how credit worthy you are. The only reason they conduct a credit check is because of concerns arising from if you're currently in bankruptcy. If you are in personal bankruptcy, there are a host of legal issues that make hiring/firing you kind of a pain in the ass... thats if the firm is making enough of an investment in you to start with. And even if you are in bankruptcy, I would think you would probably just have to sign a shit load of additional paperwork and maybe not get your sign-on until after the "vesting" period or something like that.
So lets say for example, you join the firm and get a $10K sign on bonus which you're required to repay at Prime+1 if you leave the firm within 6 months. If you are in bankruptcy and leave the firm before that 6 months is up, your firm is now a creditor and they fall into a bucket with all your other creditors who are trying to make a claim on the money you owe them. So if I'm Goldman Sachs, I don't want to give someone a "loan" -- thats essentially what a sign on bonus is in the above scenario, its a a 6-month zero coupon loan which is forgiven at maturity -- who is currently in bankruptcy and from whom I won't be able to recover my full claim. And that is ONLY a concern of theirs if the loan they are giving you is substantial enough to where they wouldn't be willing to wash-there hands with whatever you owe them, rather than getting involved in protracted and expensive legal proceedings. Obviously even for an MD, a $1M sign on bonus probably isn't substantial enough for a BB firm to worry about, but its more a case of precedent then. Do you want the market of professionals to know that if you shaft GS, they wont come after you for what you owe them through your employment contract?
Thats an example. I'm sure there are other ways being in bankruptcy or close to it (probably over $150K in DEFAULTED debt, for a newly minted college graduate)... could be a pain for an employer. Basically you're a liability since if they, for whatever reason, need to recover money from you, its a pain in the ass. But in this world #1- its very rare there would be a situation where they would have to recover money from you (you're not making bank deposits for them every day and embezzling money), and #2 at a junior level, no amount of money (i.e. sign-on, year end bonus etc...) is of any real consequence for them to justify legal costs associated with going after someone in bankruptcy.
SO STOP ASKING CREDIT CHECK QUESTIONS!
Ask yourself why does your employer care about your credit score?
not true. if you work for a bank company they do care. I'm having problems with this right now thank you very much.
Thanks for that! Hope you won't have write this ever again
You are fine. Like Marcus said they mainly do it to look for big problems such as bankruptcy, large amounts of unsecured debt, ect. One small default that you repaid isn't going to matter at all.
Bankruptcy is legally protected. You cannot be denied a job because of this. If you are in a small shop and someone sees it they can make something up as an excuse to not hire you, but in a big company HR is the only one so you would be fine.
Bad debt IS a reason to not hire someone. Do a google search and see all the articles on it. Companies attribute bad credit with irresponsibility or bad work ethic. I think it is wrong, but that is what goes on. You can and will be denied a job because of fucked up credit.
If you are defaulted on a 200.00 CC you are fine. If you have 15K in bad debt in collections you might not get the job.
I just re-read the post. You are fine dude, don't worry.
'dude' - I am female
Anthony thanks for all advice! Good learning lesson for future, I was really stressed about this.
The media/blogs are so eager to jump on the band wagon of creating buzz by discussing topics relevant to this economic downturn, there are all sorts of claims being made on what does and doesn't impact your career/job search.
I graduated with a shit load of debt. $40K of student loans/debt, 30K of which was 90 days past due, $15K of defaulted credit card debt in collections, and various other defaulted accounts in collections... cell phone companies, over drafted bank accounts that ended up getting closed, etc... Essentially, about 2 years into college when I ran out of money/loans to pay for school, I squeezed out any means possible to finance my education... literally anything I could muster.
In any case, I must have had a credit score in the bottom 3 percentile, without exaggeration. I worked at 2 separate BB firms and now at a boutique. Had a credit check at each one without incident.
With the level of scrutiny, pedigree and competition that is entailed in Wall Street jobs, I think its fair to say that credit score is not one of the metrics they use to assess your qualifications. They are not relying on your credit history to tell them all they need to know about your reliability and/or capacity to perform... or even to supplement that assessment. I can see someone being interested in that for say a receptionist at a small law firm or small corporate setting or something since it can be an indicator of how responsible/reliable you are... but I think thats the extent of it. Are you going to show up for work on time? Are you going to randomly call in or maybe not even call in and make up an excuse the next day... are you going to use petty cash for personal expenses and not reimburse the firm, etc...
How does shit like this affect getting a corporate card?
Colonel,
I think that Anthony is right about this, companies mostly ask for a credit history to determine if you're going to be reliable as an employee and to avert possible trouble. I think this statement sums it up well: "Bad debt IS a reason to not hire someone. Do a Google search and see all the articles on it. Companies attribute bad credit with irresponsibility or bad work ethic. I think it is wrong, but that is what goes on. You can and will be denied a job because of fucked up credit."
Personally, I do think that there is a relationship in a lot of cases to someone with poor credit being irresponsible. I've know quite a few people that have crappy credit that ARE completely irresponsible and were horrible employees. I'm sure it's not true of everyone with credit problems though.
Thanks for that, just to let you know that I had managed to find out that my credit check was ok having default and a bit of student debts (4k) with some missed payments in the past.
I've personally seen someone reach an offer stage at a hedge fund and get denied when the background check came back because he was late on some payments. I'm pretty sure it happens
he must been in pretty bad debts then..it could also been due to other reasons and they have just used this as a reason
it's happening to me right now. this whole thing is a nightmare!
Similar situation - whats happening with you?
Im with the Colonel... while it can cost you a job, the job is likely a menial clerical job... or maybe some other horse shit position.
The process to get any competitive job is faar more stringent and they therefore don't have to rely on these types of completely stupid metrics that don't necessarily bear a strong correlation to job performance, dependability or intellectual aptitude.
I'm not suggesting any of you are saying its an "accurate" metric for a job, regardless of the type. I just don't believe any competitive Wall Street job will extend an individual an offer only to rescind it because they have bad credit. Once you get an offer its because you've already checked all the smart, driven and motivation, has attention to detail, discipline, emotionally intelligent boxes. The background check is a formality to make sure you're not a drug addict, a convicted felon, a legal resident of the country and that all of the experiences/jobs/degree you represented to have possessed throughout the interview process are in fact true and you haven't been lying. Basically its to confirm that all the pieces of information to offered to allow interviewers to assess your candidacy are in fact accurate. If one of the questions were "how is your credit?" and you responded, I have a 780 score, and in fact you have a 560... then you're talking. I find it highly unlikely that after having checked all the "smart", "driven", etc... boxes, you'll be rejected because despite the successful 6-10 rounds of interviews, the passed drug test, clear criminal background check, confirmed follow-up with references and college registrars, your offer will be rescinded being you have bad credit and that somehow negates the entire interview process and all of your interviewers' perception of you.
Does it happen? Yeah, sure it does. But I just don't believe in happens on Wall Street in the types of jobs people on this board are vying for. Especially since GPA is a FAR more accurate and the standard assessment of discipline, dedication, work ethic, etc... Im very skeptical of the HF story from HarvardOrBust... I can't tell if he's being facetious or not.
Credit score and applications (Originally Posted: 12/09/2009)
Would my credit score affect on getting an offer? I see this commercials on tv that talk about how your credit score could affect your ability to get a job and i was wondering if it applied to Banking.
I know you need a perfect credit score to be a cop. But banking??
input always welcome.
I don't think so
As a banker, you will be privy to non-public information. If you had a long list of derogatory items (slow-payments, collections, repossessions, etc) you might be viewed as more prone to act on, or sell, said information than, say, someone with an 800+ Beacon score.
And while you're not going to be doing any financial planning as a banker, the issue of how well you manage your own finances could ding you as well.
I'd be up-front about it after getting an offer. Just have a good explanation, be honest, and it hopefully won't be an issue. Make sure you have a plan to remedy the problems that killed your credit score. But if you say nothing and they pull your credit and see a bunch of shit... who knows.
I have a bad score because of a fraudulent charge that I refused to pay, and later settled on a lesser amount. This came up in my background check (for a summer internship) and HR asked me about it. I was honest about it and it was fine because all my accounts are fully paid now. I don't think it's grounds for rescinding an offer, unless you have seriously delinquent accounts or something like that.
if you settled with the company you should get them to remove the offending entry on your credit report. you can get your CR free at least once a year from each of the 3 big shops. but yeah, i;ve had my credit pulled (hard pull even, which has some negative effects) during background checks...
I believe any employer that does a background check includes criminal background and credit check. It's standard procedure.
dacarez, who would you call to get the offending entry removed (the credit company i.e. experian, or the bank that issued the credit card)? also what do you mean by "hard pull"?
Your score in and of itself won't ususally stop you from getting a job, what's on your credit report will.
Slowpay's aren't great for your chances of getting an AMEX Centruion card anytime soon, but stopping you from getting a job, never heard of that.
Possible: yes Proable: No
The primary red flags on your report are declaring bankruptcy, public judgements, liens and settlements, roughly in that order. When I was in asset management and consumer banking, that was what they were looking at. Everything else was not that big of a deal.
Employers feel that somone with a Bankruptcy, public judgements, liens and/or settlements may become desperate and do something stupid. Like the poster before said, you have access to ALOT of confidential information that you can use for antyhing insider trading to idenity theft.
I have a FINRA license [a couple actually], and every January we have to do a disclosure about any arrests, financial stuff and tickets for anything outside of speeding/parking violations . Late pay on credit cards/ car/ student loans/ charge off's, etc. isn't on the list. Now if they sue you, whole different story; the boss needs to know immediately about that. If you have have any reportable problems, then it goes on your U-4, which is your permanent record in the finance industry. Good luck finding a job in finance after you get a black mark on your U-4.
Anyway, pay your bills on time from here on out, don't open anymore credit accounts, lower your debt to income ratio from wherever it is to now more than 33% of you gross pay, get your balances on your cards to less than 33% of the credit line and you should be OK. Call your credit cards every 6 months and ask for a rate decreas or credit line increse also. Before the credit crisis this always worked for me, now I have to keep an eye of those bastards.
today's useful link:
http://www.creditboards.com
great advice dzx. i'd say you can maybe go to half utilization of your available lines if you must, but pay your damn bills in full and on time for sure.
banker88, call the credit card company not experian. so, hard pulls show up on your credit report as someone having pulled it - usually when you apply for credit cards and such. a soft pull, on the other hand, doesn't show up. this is usually one that is for your viewing only, or for pre-approved cards.
more info on hard and soft pulls (which you can learn at creditboards too if you reallly want to get in-depth on this): http://www.thesunsfinancialdiary.com/credit-report/credit-inquiries-har…
Thank you for all your guidance guys, the problems I had were some 30 days late on a card. and the big issue i had was a 90 day on a capital one that was charging me a stupid fee after it was paid off so I got a 90 days late on a fully paid off card on something like $20.00
I am flipping out bc they will not wipe it off my score.
Haha relax brah, that kind of stuff doesn't matter. I had a card unpaid for like 7 months cause I was arguing with them over a fraudulent charge. But it's now paid off and the card is closed, and everything else is in good standing. Nobody is a saint (especially not bankers). They just wanna make sure you don't have any serious issues.
I'm sorry to dig up an old thread but:
I have one amex card in MY name that ive never missed a payment on, EVER. however, in 07 someone who i was formally friends with got a hold of my information and fraudulently opened 4 credit cards. I've been disputing them for about a year and a half now, and have yet to settle or pay them.
After reading this post though, it seems like in the scheme of things it may just be worth it to settle? It totals about 2 grand or so, nothing crazy. After which, if I get an offer, I'll just tell them upfront so there is total transparency?
thanks guys
I don't understand the point of settling? Can someone explain? Settling will not improve your credit score. You can settle. OR you can not settle and wait for the statute of limitation on the debt to pass. Neither option will increase your credit score. If you do not settle, you could potentially have a public judgement. But.. in that case, you just settle quickly. This doesn't make sense to me.
Hey Barboone, what happened with your credit card problem? Something like that happened to me as well, delinquincy and account closed becaused of a $10 fee, that I'm still disputing.
It should be okay. When I left the States and went back to Asia, HR did a credit check and discovered that I had outstanding credit card debt that I forgot to pay off. HR just told me to take care of it (i.e. pay it off) and that was that.
Credit Check, please help! (Originally Posted: 07/14/2010)
Hello!
I have a massive problem and I dont know what should I do...I have just graduated with First Class degree in Finance, have 2 years work experience and...have defaulted on my credit card for a stupid amount of £500 because of late payments and my own stupidity...I have an arrangement with the bank to repay that BUT I am now in the process of interviewing for analyst role at BlackRock and IF they do credit check will they withdraw my application??? I have last interview next week...should I tell them about this that I might be decline and explain the situation, bring my credit report with me etc or leave it till they offer me a job??? PLEASE HELP!
Did you give them permission to run a credit check anywhere in their application? Either way, I wouldn't mention it unless they bring it up first.
No- I havent havent them permission...although when I submitted my application online I might agreed to run credi check..thanks for advice! I will wait for them to bring it up first in case I get the job.
For all those people with credit report questions, here is a good answer (Originally Posted: 03/26/2007)
Read this posted elsewhere:
"The company I work for does a complete background check, fingerprint, credit check I have to be licensed with the state the whole nine yards.
Their credit criteria is a point system no more then a hundred points or you do not get hired no exceptions the way they calculate it is 10 points for 1 30 day late 50 points for a charge off 25 points for a 60 day late. I think its 50 points for a paid judgment, if anything is unpaid no hire."
Link: http://creditboards.com/forums/index.php?showtopic=242639&hl=financial%…
Corporate cards are a different animal so it shouldn't be a big deal.
I still say that horrible credit (charge offs, etc) can and will stop you from getting hired. HR has grown to become the Godzilla of companies.
What exactly is a "charge off"?
It's when they are tired of trying to get their money from you and they sell off your account to a debt collector.
They may sell your account for half the value (let's say you owe 1,000) the company says F*ck it, we just want something outta this deal so they take 500 from the company, and then the company calls your cell phone, home phone and work phone into submission to try and collect the entire 1,000 you owe. This drags your credit rating into oblivion...
I never got the point of debt collectors. As long as they don't beat your ass, why would they expect you to pay them, when you couldn't pay the original company? It's not really hard to avoid some phone calls..
Not saying I'd do something like this, but never understood how debt collectors work.
Well, depending on the economic environment, companies will either make a decision to keep their sub-prime clients in or out of their portfolio. In a poor economic environment (one in which we may be heading) charge-offs are higher. Debt collectors are simply betting that they're investment cost will be outweighed by what they are able to collect. Even if they get $100 from you and they paid $35 for your debt, they net at least $65. Essentially, they're gambling...
In a declining rate environment with favorable economic data, (good job-less claim data(well below 400K)and high sub-prime lending to name a few, actuaries and historical data suggests that charge offs are fewer. Some debt collection agencies can even put restrictions on your personal accounts depending on the value owed...
This just goes to say that anybody who knows what a debt collection agency does to your credit rating, would know that it put's you at a severe credit disadvantage for years to come if you do not clear it up. You may either not qualify for credit, or your interest rate will be more than double of the average credit worthy consumer, which may potentially drag you into more debt. And any sane person knows that the ABILITY to acquire credit, affords you many borrowing/investment opportunities.
Credit check - Will this be an HR Problem? (Originally Posted: 03/26/2007)
I know that incoming analysts receive a credit check before they start. I took out an undergrad loan for around $15k. I paid the $150 per month on it for about 3 years. My mom cosigned and my mom recently filed for personal bankruptcy. Since she cosigned, that autically sent the loan into default mode. The bank automatically wrote the loan off as a bad debt and therefore wont take any or my payments. On my credit, it comes up as a seriously delinquent account and I am told that it will continue to ring up as a late payment every month for the 5 year stay that my mom's bankruptcy demands.
I am currently contacting a lawyer to see what he can do but I am wondering that if he cannot clean this up (or if he cleans it up somewhat but it still remains as a default on my credit) will this be a concern for the HR department?
Any help would be great!
I smell BS.
It is next to impossible to get a student loan written off, and you're saying they did it just because the cosignor filed?
As I recall you need to prove "undue hardship" in order to write off a student loan.
Maybe this actually happened, but it definitely set off my BS detector.
Is this a private loan?
lol. BS Detector
student loans actually get written off quite frequently and his mother filed for bankruptcy...isn' this undue hardship?
http://bankruptcy.lawyers.com/Student-Loans-In-Bankruptcy.html
Student loans are not like credit cards or mortgages.
It sounds as if this loan is private and not government backed. (As in Sallie Mae)
In which case, his case may be correct.
Either way, you should probably address it to HR before they come across it. Don't go into great detail, but make them aware of your situation. Sorry bud. Keep your head up!
Banruptcy law protects creditor's from coming after my mom for the debt. Since she cosigned, the creditor's (the bank) are prohibited, by law, from collecting on the debt (that includes collecting it from me). There is a provision in the loan contract that if my cosigner files for bankruptcy, then the loan automatically becomes due in full (the full $15k). Since I dint pay the $15k, I defaulted. They then wrote off the loan. The loan is however non-dischargeable. So even though they wrote it off for tax purposes, they can still come after me for the debt AFTER the bankruptcy protection is over...which they will likely do. Until then, they will not accept any payments from me (which I think is unbelieveable) and every month shows up as an unpaid payment. Its fucked up.
Anyway...assuming I can't get this taken off with the help of a lawyer. Will this warrant an HR problem? I will probably call the HR department to find out a for sure answer, but I was curious to what you guys thought on this first...
Has anyone ever heard of someone geting fired right before they started b/c of a credit problem?
But nonetheless, I am sure that Wells Fargo knows their contract lending pretty well.
I really could care less about the debt. I just want to know if it will hinder my chnaces of starting or not...
Advice for informing HR about credit check (Originally Posted: 09/10/2013)
Hi everyone, I received a full time FO role in a BB/HF after the summer. A month later a $300 collection item popped up in my credit report. I immediately paid it and am waiting for my report to update which can take 90 days. In the mean time I am expecting to get paper work for a credit and back ground check in the next couple of months. Do you guys think I should contact HR even before this and let then know of this or should I wait for the background check paper work first and then let them know?
Thank you all
Keep your mouth shut. No need to say anything here unless they ask you.
Relax man. You're fine. The only thing that would throw up a red flag in the credit check would be a previous personal bankruptcy.
Wait for the background check. It might not even show up on there. Your credit score should be fine.
so when I interned there, they did a credit check and I saw their name listed on the credit report when I looked at it last week. So I am pretty sure they will see the collection when they do do the credit check again this time. I am just contemplating the best approach given that I know that they are going to see it.
defaulting on a loan- credit check (Originally Posted: 03/26/2007)
ok, say you took out a college loan and didn't pay back the agreed monthly fee for about two months...but then the third month, you paid in bulk for the two months and paid for the third month and also paid in advance for the fourth month...
does the fact that I didn't pay for the first two months hurt my credit rating? will HR have a problem with this when they do credit checks?
You didn't default, you were delinquent.
Most likely they reported it as such (they typically won't do anything until you are 30+ days past due, other than charge you a few bucks).
It will hurt when you go to get a credit card, but its not something you're going to lose a job over.
yeah, they did charge me a few bucks...
so sad, so you are positive HR won't care?
omg...just saw this online...
"Defaulting on a student loan or being delinquent is not a good idea - it will damage your credit history and prevent you from getting future loans, cause great aggravation, or even worse, prevent you from getting a job that requires a credit check."
You went 60 days delinquent, it shouldn't be a concern for HR, but I can't say with certainty.
Your bigger concern is getting an apartment, if you don't have your parents cosign.
woops! I haven't gotten an apartment yet...
this is so sad, I could totally have paid off that loan in the blink of an eye with a one time payment- I just procrastinated and was extremely lazy
If I lose my job because of this,I'll kill myself
I don't think it will be a big problem. Why don't you call HR and let them know?
I've already alerted them about something else which they ended up not having issues with
don't want to come across as a whiner or as someone with issues
Delaying a payment or two does hurt your credit rating but it will have a minor effect. Not something that you'll have to go and kill yourself. You should be concerned when your credit rating is extremely bad and that will happen once you start DEFAULTING on your loan payments and Credit card payments.... etc.
Do note that there is a DIFFERENCE between DELINQUENT and DEFAULT......
so being delinquent isn't so serious?
why does it even need to be a bad thing if I paid off the payments and fees for paying late and even paid in advance for future billings?
So lets see; you agreed to pay a certain party a certain amount of money at a certain time. You did not do so. You did not do so until T+60 days. And you want to know why it has to be a bad thing?
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