Credit Report A Factor In Hiring

We’ve come to accept that our credit history will be pulled and checked if we want to borrow money. That’s fair enough. We’ve begrudgingly accepted that insurers set car or home insurance premiums in part based on how customers handle their credit.

A growing number of people affected by record joblessness and foreclosure rates nationwide now have a new worry: Will bad credit keep me from getting the job?

Regarding the use of credit background checks for employment, supporters say the checks are a smart business tool for certain industries and critics counter that the reports unfairly discriminate against minorities and those affected by the recession.

With millions of Americans nursing damaged credit reports after a bruising recession, some lawmakers are seeking to limit the use of credit reports as a factor in hiring.

According to The Fair Credit Reporting Act, employers are required to receive written authorization from an applicant to run the report and then must provide that person, or employee, with a copy of the information.

But, do workers with money troubles have a propensity to steal from their employers? If a person has lousy credit, is he or she is more likely to embezzle money or accept bribes? There is insufficient data to support a correlation between a credit score and job performance and risk.

Certainly there are some jobs where it does matter how an employee or applicant handles money. Some employers are required to pull a credit report if an employee is going to handle cash or work in a financial services position. At least that makes sense.

The assumption that is made is, if somebody is behind on their bills, then it tells something about their integrity or responsibility, but in many cases that assumption is flawed.

This trend of employers digging into people’s personal finances is something we should be challenging and restricting.

DMCC is a 501 (c)3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with debt.  Education is provided free of charge to consumers, as well as personal counseling to identify the best options for the repayment of their debt. To speak to a certified credit counselor, call toll-free 866-618-3328 or email contact@dmcconline.org. DMCC is located at 3310 N. Federal Highway, Lighthouse Point, FL 33064.

Raising Your Credit Score

Let’s face it, now a days, a high credit score isn’t easy to achieve. Not only do you have to master the basics — maintaining positive payment history and a low debt to credit ratio, but in order to be part of the upper echelon, you must pay attention to details as well.

Knowing what characteristics those with the highest marks possess can lead you in the right direction.

Since the bulk of your credit score is determined by your payment history and the amount of debt you may or may not have currently on file, having a clean record and impressive payment history is key.  Those with perfect credit scores use credit regularly while paying it off on time, every time. They also have a squeaky clean record. The credit elite have no liens, no bank repossessions, no settlements, no debt to speak of. Nothing!

Top credit scorers also have a diverse set of accounts. A careful balance of credit lines including a mortgage, a car loan and a few credit cards on file.

History, also, is paramount in determining your credit score. Typically, due to age, our parents stand a better chance of having a higher credit score than we do. Unless, of course, they have mismanaged their finances. It’s not necessarily your age, but the age of your oldest credit account on file that influences your overall score. You may want to keep that store charge card you opened up in college.

The number of credit inquiries on your record can also factor into determining your credit rating. While having large number of credit card inquires on file won’t dramatically decrease your score, it can keep you from joining the credit elite, especially if several inquiries are recorded over a short period of time. No matter what type of discount retailers offer, you may be best advised to refrain from opening up a bunch of store accounts.

To get more educational information on credit reporting and a complete breakdown of the credit scoring factors, contact DMCC.

DMCC is a 501 (c)3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with debt.  Education is provided free of charge to consumers, as well as personal counseling to identify the best options for the repayment of their debt. To speak to a certified credit counselor, call toll-free 866-618-3328 or email contact@dmcconline.org. DMCC is located at 3310 N. Federal Highway, Lighthouse Point, FL 33064.