So, you nailed that job interview. But did you pass the credit check?
Yes, you heard that right. Today, more employers are looking into job applicants’ credit reports, even if the job position doesn’t have anything to do with financial management and responsibilities.
About 6 out of 10 employers perform credit checks on at least few of their job applicants before they make their decision to offer them the job, and 13 percent of all employers perform them on all of their candidates.
The gist? According to a recent report by public policy organization Demos, which surveyed around 1000 household with credit card debt, one in 10 unemployed workers said that they’ve been rejected a job because of negative information in their credit history. The report also says that the situation may actually be worse. The true figure of job applicants who’ve been turned down for a job because of their poor credit score is probably very high.
As many as one in 8 people said that their credit scores are poor because of errors in their credit reports, Demos report noted. It also pointed out that these credit checks are preventing people who need jobs the most.
According to the report, poor credit is correlated with household unemployment, medical debt, and lack of health coverage. These factors reflect personal misfortune and poor economy and have little or no significance on how well a job applicant should perform at work.
People from households in which someone has been jobless for the past three years are more likely to report having a poor credit score than those who haven’t experienced such kind of prolonged unemployment. And it’s the older workers who are the main victims of prolonged unemployment with nearly one in two have been jobless for six months and more.
The report says that organizations were typically using credit screening for jobs that require a high level of financial responsibility, or for senior executive positions. But, increasingly, employers are conducting credit checks for positions that don’t involve financial management like delivery truck driver or serving frozen yoghurt.
The Fair Credit Reporting Act (FRCA) permits employers to conduct credit checks if job candidates give in their written consent. The applicants are required to be notified about their credit report information if they don’t get the job. Employers normally give three to five business days for candidates to start disputing their credit report if they think that the information is incorrect. In such cases, employers may take steps based on the credit report and must once again notify the job applicant.
So, if you’re looking for work, check your credit report for any errors, and if you find any then fix them immediately. Take these steps now and boost your credit score. You can get your free annual credit reports from all three major credit bureaus, Experian, Equifax and TransUnion or you can visit www.annualcreditreport.com.