Pre-Employment Credit Checks Can Cost You a Job

Did you know when a company is considering hiring you, they will likely make a decision based on your credit record? Make sure you know your legal rights rights as to your credit record, when you’re interviewing for a job.

Pre-employment credit checks make sense if the job involves handling cash or company secrets. But in many cases it’s just companies snooping because they can. More than half of all employers conduct credit checks on job applicants, supposedly checking your character, judgment and reliability.

But the reality is that anybody can have legitimate credit trouble because of a medical emergency, the death of a spouse or a bad divorce. None of these situations should rule you out from getting a job.

Employers are known to use credit checks to discriminate. Some employers actually seek out people with bad credit, hoping their new hires will be so desperate that they will keep working no matter how bad the job is.

If an employer runs your credit history without your written permission, they’ve broken the law, under the Fair Credit Reporting Act. Ten states have outlawed the use of credit histories in employment decisions. Check with a local attorney at Lawyers.com to find out the law in your state.

Four kinds of information will be viewed negatively in the hiring process:

A court judgment against you
Active accounts in debt collection
Bankruptcy
High debt compared to your income.

If it’s possible, clean up the black marks in your credit record. Otherwise, you can tell human resources in advance that you’ve been through a bad time financially. It shows you’re being honest.

The employer has to tell you in writing if they deny you a job because of a free credit score government report and they have to tell you the agency that issued the report. If you think it’s a smokescreen to discriminate against you, you should talk to an employment lawyer who represents workers.