How Bad Credit Can Cost You a Job

Did you know that employers can check your credit before hiring you? Problems on your credit report, such as defaults or collection actions can be used in hiring decisions. Having good credit could be the key to getting the job you really want.

Credit Checks for Job Applicants

Employers are increasingly using credit information to help decide who to hire, fire or promote. And it's not only government workers that are being scrutinized. Employers use credit reports as a way to verify employment history and Social Security numbers.

What Are Your Rights?

The people most likely to have their credit reviewed are those who will deal with cash or valuables, such as bank tellers, CFO's, controllers, brokers and jewelers.

If you're concerned about your credit history affecting your job prospects, here's what you should know:

An employer needs your permission to run a credit check.
The Fair Credit Reporting Act (FRCA) requires your written permission any time an employer hires a third party to conduct a background check. This includes running a credit report. Of course, you likely won't get the job if you don't agree.

A bankruptcy cannot be held against you.
Under Title 11 of the US Code, employers are prohibited from discriminating against someone who has filed for bankruptcy. If the employer cites your bankruptcy as the reason why you were not hired, you may want to consult a lawyer.

Find Out What's on Your Record

Yet another important reason to check your credit reports at least a couple of times a year to make sure they are accurate. All in all though, a couple of late payments aren't going to kill your job prospects. Employers who care about credit histories typically look for serious negative marks, such as collection actions, repossessions, foreclosures and evictions. If your credit problems aren't serious and relatively recent, most employers aren't going to care. All employers are looking for good people.