How Bad Credit Can Affect Job Prospects
The author of this article has neglected to indicate that it is a violation of the Fair Credit Reporting Act to use credit as the sole determining factor in a pre employment screening background check. Additionally, she failed to understand that an employment application is not an acceptable release for an employer to conduct a credit check on a potential hire. There must be a separate document sometimes referred to as a background authorization form, which an applicant must sign. This way there is not a “hidden” authorization granted by the applicant.
We all know that our personal credit history affects our ability to secure a home loan or open an account at a department store. But most Americans are unaware that bad credit could cost them a job.
Many employers use credit history as a tool in their pre-employment screening as just one measure of judgment and character. If you can’t manage your financial obligations, they wonder if it’s a sign of irresponsibility. If your monthly debt payment is higher than your salary, some employers worry that it may distract from your performance.
Critics of this practice say it’s unfair for personal credit history to be used when judging professional qualifications. They say there’s no link between poor credit and job performance. Many of these people have hit rough patches, and now they’re caught in a vicious cycle: To pay down their debt, they need a job, but they can’t get hired because of their debt.
June 17th, 2009 at 9:25 pm
This is rediculous. Pre-employment credit checks?? Hell the way the economy has gone for Americans only the illegals will continue to have jobs as they have no credit. What in the hell does a credit score have to do with job performance anyway. This newly adopted pre employment determination for hire smells of discrimination, profiling and is down right wrong…
July 26th, 2009 at 11:05 am
I am one of those that was laid off from financial services industry from a large foreign bank…. MBA, 20 yrs Experience, and credentials
Being in the midst of the most important job searches in my entire life after 14months, I am encountering this problem. Learned that not only the history of repayment history, but debt loads as well are looked at. Really? Without the normal level of income, debt levels would rise DESPITE any cutbacks or budgeting that you try to employ.
Lost one offer earlier this year due to incorrect info on the bureau, but didnt matter to employer. Drafted letters to bureaus, background company, and emplyer to try and explain items and corrected on file. A 60 day delinq of a paid off account from 2 years ago, and 2 30 day accounts. No charge offs, no collections, no judgements. May have lost another due to a background credit check. word of caution… “payment modifications” as some credit card companies will oblige in a reduced monthly payment, but then account is shown as closed by credit grantor, another negative entry.
My home will be put on the market now, and hopefully will sell in this market.
Given everything that has happened… I am beyond saddened. I am mad as hell about the catch 22 and being put in a position that I cannot resolve.