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Bad Credit Reports Cost Jobs

[Tuesday, July 16th, 2013]

The way job-seekers answer interviewers’ questions may not have as much to do with whether or no they get the job as they think. Candidates can be early for the interview, dress to impress, have the right response to every question and an impressive resume, but there’s one thing they might overlook-and it could cost them the position they’re seeking.

More and more employers are looking at job candidates’ credit histories and deciding whether or not to extend an offer of employment based on that person’s payment history, debt load and types of credit used. That means a bad credit report can ruin an otherwise qualified candidate’s chances of landing their dream job.

While this may surprise some people, it’s perfectly legal, and plenty of companies are doing it. According to the Society for Human Resource Management’s 2012 survey, 47% of employers run a credit check as part of the hiring process. Another survey, by New York think tank Demos, says that one out of every seven job seekers has been turned down for a job on the basis of a bad credit score.

Criminal background checks are common for many types of jobs, but potential employees might not expect their credit report to make a difference in getting hired. After all, being late on a few credit card payments, or even filing for bankruptcy, is hardly the same thing as having a history of criminal activity.

Nevertheless, people gunning for jobs in senior management or positions with access to classified information or financial responsibilities would do well to have a look at their credit reports as well as brushing up their resumes and pressing their best interview outfits.

Employers worried about possible embezzlement or theft often pay close attention not just to a candidate’s overall credit score, but to things like missed payments, account delinquencies, home foreclosures and property liens. Any of these could be red flags to a company searching for a high-level executive who works closely with sensitive information.

The Equal Employment for All Act, introduced to the U.S. House of Representatives in February 2013, seeks to amend the Fair Credit Reporting Act (FCRA) to prohibit employers from using credit checks to evaluate job candidates. Supporters of the bill say that credit checks unfairly keep qualified applicants from getting jobs and are a form of discrimination.

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