What You Need to Know about Employment and Credit Checks

Anyone in the midst of a job search already knows how frustrating the process can be and how it constantly feels as if you are being judged. Employers go to great lengths to ensure they are choosing the right candidate for a job, and in some cases that includes reviewing an applicant’s credit history. As unfair as it might seem, credit can factor into whether or not you are hired for a job.

Luckily, the law requires employers be transparent when making their decision, so you should always know if your credit report is going to play a role and if it is the reason you are turned down for a position. 

Stricter Regulations Don’t Protect Everyone

Laws regarding who is permitted to use credit history in hiring decisions have changed in the last decade. It used to be any employer could pull an applicant’s credit report, but now employers must prove credit-worthiness is a factor relevant to the position. 

For instance, if your potential job duties involve managing large sums of money, having access to confidential information, transferring money, entering into financial contracts on behalf of an employer, or acting as a named signatory on a bank or credit card account, personal credit history can play a role in whether or not you are hired. It is also within an employer’s rights to view the credit history of an applicant applying for a managerial position.

Data shows despite the stricter regulations regarding credit history and job hunting, applicants are struggling to find work because of their credit history, especially during these years when people continue to deal with and recover from a turbulent economy. You can read about the economic effects of credit checks in this report by CNN.

Is There a Benefit to Refusing to Share Your Credit History with a Potential Employer?

The idea of a potential employer viewing your credit history can be nerve wracking. In addition to exposing very personal information to someone you barely know, it also puts your chances of being hired in jeopardy.

Unfortunately, it might be necessary. If it makes sense for a potential employer to view your credit report, saying no will likely cost you the job. You are better off being open and up front, providing an explanation for any negative marks on your credit. Many employers are willing to disregard poor credit if there is a valid explanation – for instance, you have been unemployed for some time or you dealt with a medical issue. Explain your personal situation clearly and honestly and provide evidence your credit mistakes and/or the conditions that caused them will not affect your performance in the job for which you have applied.

Has a Potential Employer Asked to View Your Credit History without a Valid Reason?

If you believe a request to view your credit is invalid, or you are turned down for a job based on your credit history and the position was not related to anything financial, you might have a right to file a claim against the potential employer. It’s important to seek legal guidance and discuss the details of your case, especially if you are concerned it could be a problem again in the future.

For more information or to speak with someone about employment and your credit history, contact the law office of Frank J. LaPerch, PC at 845.942.5500 for more information.

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