Credit Checks for Employment
I read yesterday that more employers are now using the financial histories of prospective employees as a factor in the hiring process. Job applicants may get noticed from first impressions of their resumes and/or cover letters; however, having bad credit could potentially cost them legitimate job opportunities. Naturally, any job candidate should expect to take a drug test, have a background check done, and even expect a review of past jobs. But they may not know that employers across the country are increasing the use of credit checks as a cost-effective method to identify trustworthy and responsible workers.
Critics say the practice of credit checks is discriminatory, and could unfairly hurt young, low-income, or minority applicants. Financial service and banking companies were the first to regularly pull credit histories of applicants; other industries are now following the trend, along with the use of behavioral assessments to measure a candidate's integrity. Why credit checks? Well, to determine if applicants have a motive to steal, can responsibly manage their own money, or if they are able to make charges on their credit card as part of their job.
One person said credit checks should not be a decisive factor when hiring someone; they are only an indicator and need to be discouraged when not tied directly to job performance. Critics believe these checks violate privacy and unfairly punish low-income and young workers because the average American college student has $3,000 in credit card debt. Also, other Americans depend on credit for emergencies such as medical bills. A credit check does not merit a character check to prospective employees, but many employers are looking at it that way.
The federal law requires employers to inform applicants that they are requesting a credit history report, typically within the job application as a consent form. Even with varying policies from each employer, a failure to consent might terminate a person's job prospect. The law also says that if bad credit is the reason an applicant is not hired, the company must say so. With the exception of financial and banking industries, there are no clear career areas that consistently use credit checks as a hiring practice. It is a choice that can vary from company to company, and even job to job.
Candidates should check their own background before a potential employer does. CollegeRecruiter.com offers a service that allows you to do exactly that at http://jobs.CollegeRecruiter.com/JS/CareerResources/CareerCertify/BGCheck.asp .