A Negative Credit Score Can Hurt Your Job Search
It's true.
When applying for a job, it is legally within an employer's rights to request a copy of your credit report.
And, in fact, some employers review the credit profiles of existing employees for purposes of retention, promotion, or reassignment.
Many people think that credit reports are used only by lenders, but these days they are being used for more than just a lending decision.
Why do they do this? Many companies feel that your credit score is an indicator of how responsible you are.
Your personal credit report may be seen as a direct correlation to how you would handle finances for the company, especially when your job deals with finances or budgets.
Remember, your credit profile reflects how well you have met your financial obligations in the past and many employers believe that if you are financially irresponsible in your personal life, you'll behave this way at work.
According to a survey conducted in 2012 by the Society for Human Resource Management (SHRM), 47 percent of employers use credit checks to some degree when making a hiring decision.
The report states that most employers only use credit checks to screen applicants for certain positions, but one in eight, the survey found, does a credit check on every potential hire.
There is a growing grass-roots effort to limit the use of credit reports for hiring purposes.
Advocates (for limiting use) claim that it represents a form of discrimination and is not good indicator of job performance.
So far, nine states have adopted legislation that limits the use of credit profiles to judge prospective hires.
Rest assured-these background checks cannot occur without your consent, so you can't be blindsided by your employer.
They need your signed permission in advance.
And, if they do find objectionable content, they must provide you a copy of the credit file and tell you how to obtain a copy yourself.
(You can request a free credit report in this situation, as long as the request is made within 60 days of the incident.
) If you find inaccurate information on your credit report, it is your responsibility to let the employer - and credit bureau - know immediately.
You should also contact the institution reporting the incorrect information and request that they correct the mistakes since it is their responsibility to report accurately.
You can find more information about this process at www.
ftc.
gov/credit.
When applying for a job, it is legally within an employer's rights to request a copy of your credit report.
And, in fact, some employers review the credit profiles of existing employees for purposes of retention, promotion, or reassignment.
Many people think that credit reports are used only by lenders, but these days they are being used for more than just a lending decision.
Why do they do this? Many companies feel that your credit score is an indicator of how responsible you are.
Your personal credit report may be seen as a direct correlation to how you would handle finances for the company, especially when your job deals with finances or budgets.
Remember, your credit profile reflects how well you have met your financial obligations in the past and many employers believe that if you are financially irresponsible in your personal life, you'll behave this way at work.
According to a survey conducted in 2012 by the Society for Human Resource Management (SHRM), 47 percent of employers use credit checks to some degree when making a hiring decision.
The report states that most employers only use credit checks to screen applicants for certain positions, but one in eight, the survey found, does a credit check on every potential hire.
There is a growing grass-roots effort to limit the use of credit reports for hiring purposes.
Advocates (for limiting use) claim that it represents a form of discrimination and is not good indicator of job performance.
So far, nine states have adopted legislation that limits the use of credit profiles to judge prospective hires.
Rest assured-these background checks cannot occur without your consent, so you can't be blindsided by your employer.
They need your signed permission in advance.
And, if they do find objectionable content, they must provide you a copy of the credit file and tell you how to obtain a copy yourself.
(You can request a free credit report in this situation, as long as the request is made within 60 days of the incident.
) If you find inaccurate information on your credit report, it is your responsibility to let the employer - and credit bureau - know immediately.
You should also contact the institution reporting the incorrect information and request that they correct the mistakes since it is their responsibility to report accurately.
You can find more information about this process at www.
ftc.
gov/credit.
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