What You Need to Know About Your Employer Checking Your Credit
It’s the Catch 22 of a global recession: people are taking hits on their credit rating due to being laid off, while more companies are asking to see credit reports before they hire someone. Ironic? Perhaps. But it’s a practice that is here to stay, as companies use every means possible to make sure they are hiring a good candidate.
Even though it is becoming common practice for employers to check your credit rating, there are certain things you should know. Below you’ll find a list of the essential points, before you are taken aback by an interviewer asking about your credit.
Why are employers checking credit scores?
There are lots of reasons why interviewers may now ask for a candidate’s credit report. Now more than ever, it’s become a standard part of the routine background check companies usually do before hiring someone.
Companies want to make sure that they are hiring individuals who meet their responsibilities in a timely manner, and won’t have any serious financial distractions that will keep them from their work. It’s also become a deciding factor when a company is looking at two very qualified candidates with similar skills and background. In this case, the candidate with less financial hurdles will probably get the job.
Lastly, employers seem to believe that there is a correlation between financial woes and potential criminal activity. Although the theory is debatable, companies seem to think that those with financial struggles are more likely to commit theft and embezzlement.
A word of note: while employers are not taking too kindly to financial struggles, bad credit looks much better than a criminal record. In other words, you still have a decent chance of getting hired even if you have had a few debts and financial mishaps such as the odd missed car insurance payment over the years, provided that you’re an honest person.
Can I avoid the credit check?
Yes, and yet, practically speaking, no. Employers cannot look at your credit rating unless you give them explicit permission to do so. However, they also have the right not to hire you, so refusing permission for a credit check may land your application on the “no, thanks” pile.
What jobs require a credit check?
As I previously mentioned, credit checks are becoming a norm in many industries and roles. However, there are certain businesses that may be more inclined to checking job candidates’ credit than others. For instance, if you’re applying to work for a bank or some sort of financial service, you may well be asked to undergo a credit check. The same applies for positions that deal with accounts or customers’ money.
Federal and government jobs may also require a credit check. However, they only typically deny a job due to bad credit if the candidate would have direct access to cash at the business.
What counts as bad credit?
If you have had a couple of late payments, it probably won’t hinder you from getting hired. Furthermore, a bankruptcy cannot always legally be held against you – if this is an issue for you, seek further legal guidance to ensure you understand your job-seeker’s rights.
Employers who look into credit history typically look for serious offenses such as fraud, defaulted loans, debt collections, repossessions, foreclosures, and evictions. A minor fiscal mishap is typically not that much of a big deal when they’re choosing their latest recruit.
Image by Brett L.
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