Bad Credit Makes for Terrible Prospects

Monday, August 17, 2009

While the economy is impacting everybody, there are some that are being dealt heavier blows than others. While struggling to pay overwhelming mortgage notes and all the bills that come in on a monthly basis, those hunting for jobs may find may doors shut on them due to bad credit, perpetuating a vicious cycle.

While there are no clear indicators that bad credit necessarily means you are not suited for the job, employers tend to overuse the credit report when making crucial hiring decisions. Unless the applicant will be handling money (cashiers, accountants, etc.) the credit report really has no bearing on the applicants ability.

The Fair Credit Reporting Act (FCRA) and state credit laws help to regulate how an employer can obtain and use their findings. An employer must gain your consent in writing to do a credit check and the report they receive is different than one viewed by a credit agency or an individual. Full account numbers are not revealed and they won’t see a credit score, but they will be able to see late payments, collections and bankruptcies. If you are actually denied employment because of your credit report, the company must notify you so that you may view the report on which the decision was based.

In the meantime, a House bill introduced last month would prohibit employers from using credit report details for their hiring decisions. The Equal Employment for All Act, if passed, will keep credit worthiness (with some exceptions for financial firms and government agencies) out of the employment process so that getting credit at work will make it more about performance than payments.


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