Not only can bad credit cost you big bucks, it could even cost you that new job you want or the promotion you’ve been working so hard to get. It’s hard to believe, but it’s true, more and more employers are pulling credit and screening out job applicants.
I vaguely remember a conversation from a few months. The person I was talking to mentioned how he needs to get his credit in order so he could get a better job. I had to give my thumped look. You don’t often get to see my thumped look.
I know business owners and self-employed people may need to furnish credit reports for business loans or big contracts. Also I was aware of top level sales executives at large companies needing to furnish a credit report annually so the company feels comfortable with their money and debt management. But I was not aware of how this practice had trickled down to include regular folks in regular jobs.
At first I didn’t think employers could do this and I wasn’t sure it would prove to be terribly informative. But I found they could. I also did some research on how extensive this thing was and found that employers are increasingly relying on credit reports to screen out job applicants. Here is what I found on the Bankrate.com website:
More and more employers are using credit reports to screen employees. The use of credit checks has increased 55 percent since 2000, according to a 2006 national survey conducted by Harris Interactive for Spherion Corp., a leading recruiting and hiring firm.
So what are employers using your credit reports for?
… ”many companies use credit reports primarily for authentication of the name and address history of the applicant, perhaps paired with a separate search of criminal history, rather than for the credit performance of the individuals being considered, especially if there are no significant credit issues.”
Again, is this legal? According to the FTC, it is permitted as long as the employer receives a written permission to pull credit. I guess it’s part of the background check.
There is more at stake with the credit report, manage it well.
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on Jul 21st, 2008 at 5:01 pm
You can’t even get a job with good credit in Arizona! The economy and the job market is terrible! I just came from NY and let me tell you, it’s pretty downgrading to be considered overqualified in a pretty expensive state! At least in NY you can get a job. Without a job, you can forget about your dream home, career goals, etc. Just move on to someplace where there are actual jobs. Even with a high end degree the pay is just down right pitiful! What a shame for such a beautiful state!
If you want a good credit score, don’t stay where you can’t get a job and pay your bills!
on Jul 22nd, 2008 at 2:32 pm
Christine,
Sound advice indeed. Sorry to hear of your job woes. What do you do?
on Jun 6th, 2009 at 9:25 am
You have presented good suggestions. Dealing with bad credit efficiently can help in removing the arrears contained in the credit history and achievement of a quality job.
I firmly believe, along with your aspects, one should keep his criminal histories clean as employers have great interest in knowing this information of the applicant.
on Sep 21st, 2009 at 3:48 am
It’s far too easy to have a bad credit report that through no fault of your own. It’s far too hard to fix it when it does. For that reason alone it should never, ever be used to screen someone for a job. Financial responsibility is rarely reflected in a credit report especially these days and moreso in this economy!