Credit Report Problems Hurting Employment


Credit Report Problems Hurting Employment

Friday Night Flip Off #12 – Job Hunting (Photo credit: macbros)

Credit Report Problems Hurting Employment

Are credit report problems hurting employment for a lot of people?  Does a less than stellar credit report indicate that a job applicant may be or become a security risk?  Do financial negatives mean you are more likely to steal or take a bribe?  An even bigger question is does having credit problems mean poor decision making ability? Does it indicate that the job seeker has a slacker attitude when it comes to how the job applicant plays the game of life?  With 47% of employers saying they pull credit reports on some or all applicants the issue has come into sharp focus.  It should be noted that it is the credit reports, not the credit scores, that the employer sees.  There is a lot of confusion about access to credit scores.  The 3 major credit reporting agencies state unequivocally that employers do not get the scores.

Denial of Job Over Credit Must be Disclosed

A 1970 law The Federal Credit Reform Act requires that a prospective employer tell a job applicant if the reason for a job denial was a poor credit report.  This is just a matter of fundamental fairness…especially since reliable figures now prove there are mistakes in at least 1 in 5 credit reports.  Unfortunately many job applicants fail to review their free annual credit reports before they begin their job search.  Mistakes take some time to correct.  Sometimes a long time.  A person who is out of work does not have a long time.  The lack of income in the meantime may doom that person to more and more negatives on their credit reports.  Now they are trapped in an endless downward spiral.  I have identified 13 Employment Reporting Agencies.  There may even be more out there.  The fact that there are at least 13 proves that this business is booming.

  • Accurate Background
  • Contemporary Information Corp
  • Early Warning Services
  • Employee Screen IQ
  • First Advantage
  • CIS
  • Hire Right
  • InfoCubic
  • Intellicorp
  • Trak 1 Technology
  • Verifications Inc.
  • The Work Number

Blacks, Latinos Hit Hardest by Credit Report Problems Hurting Employment

Reliable statistics demonstrate that credit report problems hit minorities at least twice as often as whites.  Lack of health coverage in minority groups in particular often results in health and medical bills pulling down their credit picture.  Medical related debt comprises more than half of all negative credit entries.  Cynics, of which I am one, know that the credit report excuse can be a backstop for a prospective employer looking for an easy no for other reasons that may be suspect.  Credit report problems hurting employment of minorities is frequently a smoke screen for not wanting to hire a minority just because of their being a minority.

Credit Report Problems Hurting Employment in High Security and Financial

Certainly your credit score is a legitimate area of inquiry if you are applying for a job with high security requirements.  A person in financial trouble may very well be more likely to take a bribe to look the other way where wrong doing is concerned or even to steal.  An employer who uses this as a reason for putting stringent requirements on applicants should be able to demonstrate that they make periodic checks on those already employed.  If those already on the job go into heavy debt after they get hired do they get fired?  Most of the time I suspect the credit standards are far different for those already employed.

Credit Report Problems Hurting Employment Future Policy

There are many arguments pro and con for giving credit reports a role in the scrutiny of job applicants.  I’m sure that Bernie Madoff and his cronies had sterling credit reports even as they proceeded to loot Billions of dollars from widows and the elderly in general.  Being rich or clever is no guarantee of moral superiority.  Credit reports are just one facet of evidence that can be used or abused in composing a realistic portrait of the character of a job applicant.  There’s something new on the horizon. The Equal Employment for All Act is a proposed new law aimed at addressing the inequities of this situation.  The sponsor of this bill, Rep. Steve Cohen (D-Tenn.) says:  “The use of credit checks is a growing trend and a dangerous one.  It’s kind of created an interest group that fights this legislation because the credit-check people make money out of it.” If passed, this bill will prohibit employment credit checks in most cases.

Equal Employment for All Act Update

The Equal Employment for All Act has been introduced in the Senate by Sen. Elizabeth Warren (D-MA).  The high profile Senator Warren eloquently champions the Bill as necessary to eliminate the needlessly high entry barrier that credit report scrutiny creates for women, minorities, students and the elderly.  No correlation between credit reports and job performance has ever been proved.  Not surprisingly the bill has no Republican support in the Senate.  In the past 3 years 10 States have barred the use of credit reports for employment purposes. 

Pulling of a credit report by an employer is a soft pull with no negative effect on the applicant’s credit score
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After practicing law for 37 years Edward F. St. Onge, Sr. now devotes all his time to helping consumers achieve a high credit score with amazing speed. Learn the counter-intuitive secrets to credit scoring through his down to earth instructions backed by extensive knowledge of the laws and trends. All of the latest tricks and techniques that they don't want you to know now at your disposal. At last a level playing field for the consumer!

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