Moving Up: Should your credit matter when applying for a job?

Scrabble letters reading "credit" on pile of money

401(K)2012/Flickr

There are many barriers that seem to go up when people are struggling to find a job. But one of the most frustrating is that some employers check your credit report when reviewing applications and use that information in deciding whether to hire a particular individual. One of the problems is that an individual who is looking for work may be unemployed and unable to pay their bills because of the limited amount they are getting from unemployment insurance (if they are getting that, as many people are only eligible to receive this assistance for a limited time). Other people may work for companies with inconsistent work schedules, which can cause them to fall behind on their bills and get bad credit.

There are many job applicants whose credit should be an issue. One example is senior managers of companies. If you want to run a large or medium-sized corporation with billions in sales, your ability to handle your own finances should be considered. However, most people who want to run companies make very good salaries already and have access to financial resources that allow them to maintain excellent credit.

If you have serious problems with your credit, it’s important to try and rebuild your credit so it does not prevent you from getting hired. There are 11 states that restrict the use of credit reports in hiring (in the Street Sense area, the only state that restricts using credit reports is Maryland). The potential employee doesn’t have a right to refuse to allow the company to check their credit, if they want to be considered. When you sign an application form, it indicates that the company may require a successful background check — the release for that is either indicated in the application or in some cases in a separate release form.

Which types of employers are going to check your credit? One Washington D.C. employer that makes it a practice to check is the federal government. When you apply for a government job, they can check your credit (and most other parts of your background) and that is justifiable because you are applying to work in a position that involves a huge amount of trust. You might be applying for a position with an agency where you have access to confidential information. It is crucial to check people’s credit because hiring someone in severe financial difficulties could result in them being vulnerable to bribery or extortion.

There are many employers who will probably never check your credit. Many jobs such as those in fast food and large retailers don’t usually check, but that could change if you find yourself being considered for a promotion. Also, be prepared for employers to start being more diligent in checking credit if the economy hits another recession and employers go back into being more selective about hiring decisions. In the next issue, we will look at different options available to you to build up your credit.


Issues |Jobs

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