Barbara Kiviat quoted in HuffPost article

Barbara Kiviat

Despite A Lack Of Evidence, A Credit Report Can Still Be Used To Deny You A Job

About a third of employers are estimated to run credit checks on potential hires. Here's what you need to know.

Barbara Kiviat, a sociologist at Stanford University whose research included interviewing 57 hiring professionals about how they use credit reports for employment decisions, calls this “moral storytelling.” Kiviat found hiring managers choose to assign blame for unpaid debts to either the person or their situation, and how they pick is subjective.

“They are trying to figure out did you not repay because it’s something about you as an individual and, therefore, I don’t want to hire you because you are going to bring that into my company, or did you not repay because of some big-picture force that was beyond your control,” she explained.

Kiviat described in her published research a situation in which a credit report was the deciding factor against two of three finalists vying for a school presidency. Both of these candidates were women with credit problems, one from a divorce and one from a mistaken foreclosure. The candidates each had to explain their situation to a recruiter, which satisfied the recruiter but not the chair of the school’s board of trustees, a banker who refused to hire either candidate.

As the headhunter later explained to Kiviat, “Someone like him, who comes from generation after generation of inherited wealth, has no idea how hard it is to maintain a good credit rating, but he sat in judgment of these women post-2008, and he held that against them.”

Kiviat said that employers don’t pull credit reports only to decide if a candidate is trustworthy. There are employers that would prefer not to look at credit history but do so because of regulation.

“If you’re a financial institution and you are getting regulated and you need to prove to your regulators that you are hiring financially responsible people, the credit record is an easy-to-understand way to do that,” she said. “In my research, investors sometimes would want to know: ‘Do you run credit on your employees?’”