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About Employment Credit Checks: What You Should Know Before Applying for a Job
The U.S. still has about 6 million fewer jobs than it did in 2007, a devastating statistic realized by millions of people still looking for work today. If you’re amongst those suffering a job loss, it’s easy to see how your finances may have suffered.
Maybe you’ve lost your home, experienced repossession, or stopped paying your Credit Card and other bills. Maybe you’re even headed towards bankruptcy, or are saving up for such a filing (a recent study from economists at Columbia, the University of Chicago, and Washington University found a spike in Chapter 7 filings after receiving tax rebates). Like most people who are struggling in this economy, your finances would improve if you could obtain steady, full-time employment. However, many of the people who most desperately need work find themselves unable to pass an employment credit check because their Credit Report is full of negative marks. It’s an unfortunate irony that frustrates many well-qualified job seekers.
Here, we’ll cover some facts regarding employment credit checks. Then the next article offers some advice on how to prepare for potential employment credit checks, as well as what to do to mitigate their impact.
Now, some facts about employment credit checks:
Current employees are at risk too. It’s important to note that employers can request consent to run credit checks on job candidates as well as current employees. This can particularly come into play when an employee seeks a new promotion or job transfer.
Employers need your permission to check your credit. Current and future employers cannot request your Credit Reports without your knowledge. Rather they must have you sign a consent form (either a specific credit check form, or a general consent document) prior to obtaining the documents. This means you shouldn’t be caught off guard, and may even have the opportunity to explain a poor credit history.Your Credit Scores are not being checked. Many people are confused about what employers can view when they conduct a check of your credit. Employment credit checks only involve your credit reports, not your credit scores. As a result, an employer has to interpret what they see in your credit history, as opposed to making a decision based on a number.
Employment credit checks are not as common as you may think. Certain jobs are much more likely to request a credit check as part of the hiring process than others. These positions tend to be for jobs requiring a formal background check, drug screen, and/or security clearance, like law enforcement. Credit checks are also likely for government jobs with state and federal agencies. You’re also more likely to face a credit check if the job you want requires handling large quantities of money, is a high-level management position, or requires access to confidential information. Many of these employers justify looking at your credit information because they want to determine if a future (or even current) employee is at risk of undue influence due to financial strain, as well as whether they can make responsible decisions. Also, several states have subsequently further limited the scope of employment credit checks, so the rules in your state may be more restrictive than what is stated here.
Bankruptcy cannot be held against you. Bankruptcy, by itself, cannot be used against you when applying for a job. But unfortunately, if your credit report is riddle with delinquencies or collections accounts that accrued before you filed for bankruptcy, any of this information may be used against you.
You should receive notice if your credit history was used against you. Just as employers are required to get your consent before running credit, they are required to inform you if your credit history led to an adverse response. They are also required to furnish you with a copy of your credit report, an explanation of your legal rights, and contact information for the credit bureau used.
by CreditQ Staff
Published 04/18/2012 15:37
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