What To Do When A Candidate Has Bad Credit

One of the offerings that Vanderbloemen Search Group provides for churches is a comprehensive background, social media and credit check. By providing these services, we are behind hundreds of candidate credit checks per year, good and bad. 

While most candidates have great credit, and some don’t even have a credit card, other candidates have less than perfect credit. This isn't a dealbreaker in the hiring process necessarily, but certainly something worth noting. So what should an organization do when one of its candidates has bad credit?

Here are 5 things to consider. 

1. Understand that debt is part of a candidate’s story.

How a candidate got into debt (and how they plan on getting out) is more important than the dollar amount of debt that they carry. One of the benefits of running the background check after having a conversation with the candidate is that a relationship is already established and you have heard his/her story.

Did this person acquire the debt attending college or seminary? Did he/she gain the debt when a member of the family got ill while serving at a church that didn’t provide health insurance? Did he/she put their church plant on a credit card? These are all real life examples of how candidates have acquired debt and were willing to share their stories with those who asked.

2. When talking with a candidate about their debt, be sure to do so in a gracious manner.

Listen for candidates to acknowledge what went wrong and what they are doing to move forward. A candidate’s openness on matters of debt and finances can be a good indicator of how open they will be on other matters as well.

Try to remind yourself that we all carry some form of "debt" whether that be financial, emotional, spiritual, or otherwise. Our struggles may not line up with the struggles of some candidates, but we do all have them in some form. Being gracious shows an acknowledgement of the imperfections that we all bring to the table.

3. Pay employees generously.

I was once in contract negotiation between an unmarried candidate and a church client where the initial salary offer was very low and the health care deductible was very high. I asked the Executive Pastor how he expected her to pay her deductible if she got sick or was in an accident. “She’s young, she shouldn’t expect to get sick,” was his reply.

When setting salaries for your staff, take into consideration the market value of the role, the cost of living in your church's zip code, and the amount they will pay for their health insurance. Don’t assume your employees won’t have to pay a sky-high health insurance deductible at some point. Pay employees generously so they can maintain a balanced budget and be generous in-turn.  

4. Provide flexibility for a side-hustle.

One of the ways Dave Ramsey suggests to pay off debt quickly is for individuals to develop a side-hustle: a source of income that isn’t your “job”. William Vanderbloemen is a fan of the side hustle and has written about how they are beneficial to not only the employee, but also the employer.

If you have employees who have side hustles, provide flexibility for them to flourish.

Note: It might be wise to have a policy on “side hustles” (i.e. if employees need to disclose them and what to do if an employee's side hustle interferes with their job).

5. Offer credit counseling as a benefit to all employees in your organization.

At Vanderbloemen Search Group, Stewardship of Life is a core value. In an attempt to help employees steward their finances (and their lives, by extension) well, a completely voluntary Financial Peace class meets once a week here at Vanderbloemen. Perhaps offering a class at your church or contracting with a financial advisor would be beneficial to all employees, no matter what their credit reports look like.

What are some other suggestions to dealing with poor credit?