Is Bad Credit Preventing You From Getting Hired?

According to a survey conducted by applicant.com, 91% of the people believe that employers should not run a credit check and make hiring decisions based on this. It is unfair how something that is beyond your control affects your chances of being hired.

Credit worthiness affecting employment

Traditionally, employers have been making hiring decisions based on an applicant’s credit worthiness. With recession having hit many people hard, it is understandable that you have been late with payments. But don’t employers understand that lay offs and the bad economy have led to this? There are many examples of people being turned down for jobs due to bad credit. The question that arises is how does a person’s not paying his or her bills on time indicate that he cannot be trusted to serve the company well? The controversy rages and like every debate, there are two sides of it.

The trend of checking credit before hiring or promoting a person is increasing steadily.

While the debate rages, employers continue with their credit check. In this year alone, there has been a whopping 7% increase in employers conducting credit check. It is done when you are either an applicant or due for promotion.

Giving Permission for credit check

When you give your prospective employer permission to check your background, he can also use it to take a look into your finances.

If you have applied for a job, your employer conducts the check with your permission after your provide your social security number. As per the regulation laid down in Fair Credit Reporting Act, the employer cannot conduct the check without it. It is a win-win situation for them. If you do not give permission, you can be rejected for withholding important information and if you do, you can still be rejected on account of bad credit. So what should you do?

Be Honest

You can review your credit report before you apply for the job and let your employer know about your financial problems and the reason for them. Chances are that he will understand them and give you a fair chance.

Your credit report and application form are compared to verify the accuracy of your statements. Therefore, do not give any false information.

How much your report influences the hiring decision depends upon the level for which you are applying and your employer.

Generally, managerial positions require stringent background checking as compared to lower levels.

 

Your rights under FCRA

The prospective employer can go around the law and even if they are being discriminating on account of bankruptcy, you cannot nail them unless they cite it as the main reason for refusing employment. 

As per Fair credit reporting act, your employer must inform you if his decision not to hire you is based on the revelations of your credit report. But not many people want to reveal that and simply say that they did not hire you because they found a more qualified candidate. Whatever it is that your credit report showed, bankruptcy, late payment of bills, outstanding debts or collections, the employer could find a way out of having to disclose the reason for your rejection. Since bankruptcy is one issue where they cannot reject your application for employment, they prefer to go around it and find another reason. The law has so many holes that it leaks like a sieve.

Review your credit report

Keep your report clean and review it regularly. If there are negative items, correct them as quickly as possible.

To avoid all this, review your credit report periodically and if you find negative items, work hard to remove them. It is not the petty details like being slightly late with a couple of payments that matter but bigger issues like being regularly late with your payments. They also look for serious issues like foreclosures, evictions and other things.

Employment check reveals a lot of information about the candidate. It is done to decide how valuable an asset he could be to the company. It is up to you to fix the flaws in your report and not give your employers a chance to reject your application. If you have genuine problems, talk to your employer about them and most likely they will understand.