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 firstname.lastname@example.org. DMCC is located at 3310 N. Federal Highway, Lighthouse Point, FL 33064.