Investment Banking Background Checks
As everyone gears up to start their full-time investment banking jobs or summer internships in a few months, I’ve been receiving more and more questions on background checks.
What can background checks actually reveal about you? Should you be afraid if you told a slight fib and they find out? Who will these background check agencies actually speak with?
Background Check Timing
Background checks are always done after you’ve already accepted an offer at an investment bank, never before or during the banking interview process. It’s simply too costly to justify doing before you accept an offer.
For full-time hires, background checks are usually done before you receive your signing bonus in the winter or spring, but that’s not always the case; some banks do it just after you start training in the summer.
Background checks are conducted on summer interns a few months before they start, although I’ve heard that some banks (generally boutiques and smaller firms) don’t do it at all (!).
The Scope Of Background Checks
The scope of these background checks depends greatly on the bank. Some take it very seriously and go into detail on everything in your past, while others just make sure you weren’t one of the founders of Enron.
The general rule of thumb is simple: don’t lie and don’t put any lies in writing on your banking resume or on the background check form.
Generally background check agencies will run a credit check on you, verify your employment history, and check your criminal/police records. They may also request or gain access to your academic records, and often they will request your transcript.
Medical records are one notable exception - banks cannot legally obtain them without your explicit consent and should not make them part of a background check.
One final note - pretty much all banks will require a drug test as well so you should be prepared for that!
Credit Check
This is one area where you don’t have much to worry about. Missing a few credit card payments will not sink you, nor will having a low credit score (e.g. under 600).
They will care if you’ve declared bankruptcy before, and this is the one thing to watch for with credit checks. In some states it is illegal to discriminate against employees who have declared bankruptcy, but this doesn’t mean it won’t be flagged and brought to their attention
If you have declared bankruptcy, simply list it and provide an explanation. It’s highly unlikely anything will actually happen to you, but better safe than sorry.
Employment History
The agency will speak with each of your former employers that you list on your resume and on your background check forms to verify that you worked the dates you listed.
Does it matter if you’re off by a month or a few weeks? No.
It does matter if you’re off by a year or completely fabricate a position you never had.
You don’t need to worry about every part-time ice cream shop job you’ve ever had. Just list the major jobs and internships - no one is going to fault you for not listing that 10-hour a week part-time job at the university library your freshman year.
Aside from verifying the employment dates, there’s not much information they can get very easily… at most, they might verify your reason for leaving and salary, but aside from that employers are not likely to say too much.
References
Along with your employment history, banks will typically ask you to list 3-4 references who know you well and can speak about your personal qualities as well as your work ethic, teamwork, etc. Basically the qualities that any investment banker needs.
You should be careful to pick the appropriate references here. I listed a combination of family friends who knew me through the years and previous summer internship bosses I had.
Before I submitted the background check form, I spoke with each of my references briefly to give a heads up about the background check and let them know what to expect.
I strongly recommend you do this, simply as a courtesy to all your references and so they can give more informed “testimonials.”
Other People They May Contact
Aside from your references, be aware that the background check firm may contact people involved with any other activity listed on your resume.
Right before I started, they contacted some of the organizations I was in and emailed people to verify that I had been involved with the organization on the dates listed on my resume.
This caught me off guard - I did not expect them to look into my activities as well.
Be careful of what you list and consider everyone they might potentially contact.
Work Experience Outside The US
This is one area where background check firms are relatively weak. Especially in non-English-speaking countries (e.g. most of Asia), it is difficult to contact companies and verify exactly what you did and when you did it.
It’s much easier to get away with something questionable if it happened outside the US.
This doesn’t apply quite as much to experience in the UK, Australia, or Canada; it’s more the case in Central/Eastern Europe and Japan, China, and Korea where companies are more difficult to contact and cultural differences can prevent them background check firms from getting anywhere.
Criminal And Police Records
The general rule of thumb still applies here: don’t lie and don’t omit information. If you have a DUI on your record or some other entanglements with the law, you have to list them and explain each incident.
A DUI is not going to be enough for a firm to rescind an offer; being convicted of murder or embezzlement, of course, would probably result in a rescinded offer. 
Other crimes fall somewhere in the middle; you definitely want to`disclose everything, but it’s questionable whether or not these incidents could get you un-hired.
If you have any offense more serious than speeding tickets or a DUI, get yourself a lawyer and get it removed from your record or at least reduced in severity ASAP.
Academic Records And GPA
I’ve seen arguments go both ways on this. Some claim that by signing the release forms and agreeing to a background check, you give the firm the right to access to your university and high school records; others claim that there’s no way they can do this unless you submit your transcript.
It also depends somewhat on the state and university, but in general it’s safe to assume your college transcript will be examined.
If you inflated your GPA slightly, as in stating 3.5 when it was really 3.44, that’s not enough to get you flagged.
But if you said 4.0 when you had a 2.8, that’s a completely different story.
Bottom line is don’t lie about GPA as it’s not even that important anyway… writing a 3.9 when you had a 3.7 is just plain silly, so why take the chance?
Drug Tests
One of my co-workers once remarked that drug tests are just stupidity tests. If you’ve done any drugs recently, figure out a way to push back the drug test.
If you’re a regular drug user, though, there’s no way you can do this job. There’s always that old running joke people make about investment bankers all being cocaine addicts, but you will not survive in this job if you do drugs on a regular basis.
Written vs. Spoken Words
There’s a big difference between what you write on a resume and background check forms vs. what you say in investment banking interviews.
I’ve received some questions to the effect of, “Well, I mentioned a slightly higher GPA or SAT score in an interview… am I going to get arrested and lose my job now?”
The answer is no, for two distinct reasons:
- Those interviewing you will not be in contact with the background check firm, only HR will. They don’t have the time to worry about this stuff nor will they even remember what you said.
- There is nothing in writing, so long as you listed the correct GPA/SAT/GMAT score on your resume.
There is a small, small chance that something could happen here but it’s not worth losing sleep over.
Your Experience With Background Checks
I’m curious to hear your experience with background checks. Am I off on anything written here? Did a background check at a particular firm catch you by surprise?
Leave a comment or email me and let me know.
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And make sure your resume is easy for recruiters to use.
> Account for all years of work experience, even if only with one or two lines. Separate into relevant and irrelevant work experience if necessary. Gaps in your resume only raise red flags.
> No more than 2 pages (even if you have 20 years of experience).
> Numbers and tangible results from your past experiences are the best way to differentiate yourself.
David
Private Equity Jobs
Interesting site David, thanks for sharing.
how about omittance of subjects/modules you’ve performed poorly in the resume? or do they only care if you’ve lied about something you’ve mentioned? (if that makes any sense)
does bending the truth come into it too?
DRS: If you’re referring to the “Related Coursework” section of your resume, they don’t really care what you list there. So it’s fine to omit subjects where you did poorly.
Only way you would get in trouble is if you actually tried to hide something on an official transcript.
What if you’re a college student and you’ve done some informal interning where you’ve worked with some people at the firm but was not officially employed?
Frank - you can still list it on your resume but I might note that it was not an official employment and definitely note it in any background check forms you submit that nothing was official and there may be no records.
What about shoplifting? Would that lose you a job?
James: If it was a misdemeanor (what I believe shoplifting is usually recorded as), it should not be a big deal AS LONG AS YOU DISCLOSE IT. Always disclose minor stuff like that on the form, they always catch people for being stupid and lying about small things so you have to be really careful there.
I have a question about GPA timeline.
I had an internship last summer. This yr, I graduated. At the end of last summer, my internship boss referred my resume to some banks and funds. The GPA I put on my resume was 1 semester “older” (in other words, it has 5 semesters as opposed to 6 semesters, since before the end of summer, my 6th sem grades came out, but I didn’t get a transcript for myself as I was in NYC, so I didn’t average in the 6th semester grades into my GPA). I asked my boss if this was ok and whether it’s better to give him my resume after I went back to school and saw my 6th sem grades. He said, it was ok, and grades r not that important. So I just updated my internship experience onto my resume.
I signed my full-time offer last Dec (not w/ my internship company). I gave them the same resume as I gave my internship boss, ‘coz I am afraid that they saw diff GPA version of my resume, and that’s not good. Yet, averaging in my 6th sem grades, my GPA dropped by >0.1, but still well above 3.0. Very frankly, I didn’t mean to puff my GPA or do anything dishonest.
Now I am a little bit worried about background check. Although nobody asks for my transcript, and my school transcripts doesn’t show GPA, I think background check companies can get my 6 sems of GPA if they really want.
The background check process will be after I start. Do you think I need to explain to my HR about this? Or should I wait until if they ask me? Any advice?
Dina: I think you’re probably fine here. If your GPA only dropped by 0.1 or so, that’s very minimal… especially if it’s well above 3.0.
Personally I would not mention anything for something as small as this - they may check your GPA, but only to verify that it is at least in the range you gave. And I think they’ll understand that due to timing and such it will not match up exactly.
btw, I haven’t turned in background check forms yet. maybe I should indicate this on my background check form?
need your advice…
See my response above - I would not bother for something like this.
Another question regarding GPA; If I have a GPA say that is 3.76, could I round it up to 3.8 and mention this on the resume:
GPA: 3.8/4.0 instead of GPA: 3.76/4.00?
Yes
One question:
I’ve joined a bontique firm 2 years ago as an IT support, but soon took up additional responsibilities as a buyside analyst.
I’ve done analysis, modeling and valuations work for more than 1 year. I’ve spoken to my boss about changing my job title, but no progress so far.
I’m thinking moving into IB, but i’m suspect recruiters will simply pass on my resume when they see my current job title as an IT guy. I have 2 specific questions: 1) Can I leave out my job title, or 2) can I put it as Analyst (instead of IT Analyst)?
I’m quite keen on leaving, so what else can I do?
Thanks
I’d be careful with job titles, that is one thing they can check pretty easily… you could get away with leaving it as Analyst but when you fill out the background check forms you definitely want to note the nature of what happened. I would not leave out a title.
Hi,
I love your website and all the info is very helpful! My question is: You mentioned that once we reach superday interviews the gpa is irrelevant and performance is the key. Therefore I deduct that the gpa is looked upon in the beginning to filter candidates. So why would anyone put a low gpa knowing that they will not even reach the first round? And if they increased their gpa and performed well in the interviews and did get an offer, will there be any problems with the higher gpa even though the person is a perfect fit for their company and has prior experience in the field?
Thanks in advance!
If you -don’t- put your GPA you typically won’t even get interviews in the first place because recruiters will assume it’s really bad. So not listing it isn’t really an option unless you have a connection who will get you in.
GPA is typically not checked until the last minute and they understand it changes between interview and finishing school… so you can get away with stretching the truth a bit.
I have a question regarding criminal background checks.
When I was a freshman in college, I was pulled over on Cinco de Mayo and was asked to do a breath-a-lizer test. Because I had taken a shot of Jack a few hours prior, I blew a .021 which is very minimal but still considered drinking and driving. Because the number was so small and I treated the cop with respect, he told me that the ticket would be comparable to a speeding ticket and it would not appear as a “criminal” incident on my record.
Recently, I used a site called Intelius to run a background check on myself just to double check and indeed there was nothing on my criminal record.
Should I not worry about this incident on my official background check with an Ibank? Should I explicitly disclose this incident or not? Are the results that the Ibank is going to see the same thing as what I saw after using Intelius?
Don’t worry. I would not disclose it if it doesn’t appear on your criminal record.
Dear M&I Admin
I have a question about background checks on employment history:
I had experience in a summer internship program last summer in one of the major financial service firm. By unlike a proper internship, the whole program was more like a series of seminars, workshops and I am only required to attend these events few days in a week.
I was not paid for attending the program, so I guess it is volunteering work. My job title was “Summer intern” .
I do not have a letter of OFFER OF EMPLOYMENT, but instead I have a few certificates stating that I have attended the summer internship, signed by managers.
Now, in my resume I have sort of “bend the truth” in the job description, the actual work involved. I mentioned that the internship involve rotational work between departments and I provided administrative supports for a line manager .
Would such “exaggeration” jeopardize my offer in one of the ibanks?
Appreciate if you can answers my question !
P.S This internship was outside the U.S, and I am applying to U.S offices.
Nah especially if it’s outside the US, you’re probably fine. It’s really hard to check what specific work you did.
They could never find anything on my non-US work experience.