CAN YOUR EMPLOYER CHECK YOUR CREDIT?

Credit Checks and Your Job

Running credit checks on prospective employees has become a new trend in the employment world.  The last few years have shown an increase in the number of employers using credit checks as a part of their employee selection process.  Employers believe running a credit check helps determine which job applicants can be considered responsible and which ones are not.  Companies are starting to review past and present credit and financial problems as an indication of whether or not a prospective employee may be irresponsible in their professional life and whether they have the potential to mishandle corporate funds.

 

Apparently, employers feel that given the circumstances anyone can possibly become a thief.  This trend has become popular in industries where employees handle large sums of money, have access to confidential client information, or have access to perks like expense accounts.  Companies are also concerned that employees with money problems might steal expensive objects they could later sell to raise cash.

 

Anyone who has had trouble paying bills could find his or her finances endangered again as employers use credit information to help them decide whom to hire, fire or promote.  While this might be opening the door for an employee to file a wrongful termination suit - firing an employee over a credit check - the possibility of a potential lawsuit does not seem to stop some employers. 

 

They believe the cost is worth the valuable information they can only obtain from the credit checks.  The process of running a credit check involves a fee paid by the employer, but given the high cost of training a new employee and the risk of loss due to theft; many companies feel the fee is a small price to pay to insure they are hiring a trusted person.

 

Some disagree with this and believe running a credit check for the purpose of selecting an employee is an invasion of privacy and is discriminatory.  Job applicants are concerned that past credit problems, which may have occurred through no fault of their own, will keep them from being hired for jobs that are a perfect match for their skills and experience.  Many individuals are realizing that mistakes made in the past may prevent them from landing their dream job today.  Other circumstances causing bad credit have been divorce, job loss, and medical bills.

 

Employers defend themselves by claiming they are not doing anything they do not have permission to do.  Credit checks may not be legally ran without authorization by the person involved, so many job applications now have a credit check release.  A job applicant who is not careful to read the fine print may find they are agreeing to a credit check.  However, others may realize what they are agreeing to but feel powerless to stop it. The reality is that people know refusing a credit check is likely to cost them the job anyway.

 

Some of the information an employer can gather from a credit check on an existing or prospective employee is included but not limited to: bankruptcy information, liens, judgments, child support obligations, loan and credit card payments as well as information about who else has run a credit check on that individual.  Employers who run credit checks on employees are looking for a few key pieces of data. 

 

Specifically, they are looking to find out whether or not theses employees pay their bills on time and if the bills are late, how late are they.  Furthermore, they are looking for bankruptcy information and any information that may indicate there has been a lawsuit.  Finally, employers are looking for confirmation of the applicant’s identity.  Identity theft is becoming more common and employers want to know they are really hiring who they think they are.

 

Regardless of whether or not this practice is wrong or right, it continues.  The best way of protecting yourself from potentially bad results from these credit checks is to stay ahead of them by monitoring your credit history yourself.  While this will not erase past problems, it will at least keep you informed.  It is a good idea to take a proactive approach and explain your less than perfect credit record to your potential employer before they run the credit check. 

 

The first step in repairing your credit is to get out of debt.  If you owe credit card companies thousands of dollars, you need to settle with them before you turn your attention to your credit.  To an employer, it will appear that you are responsible if you are debt free and do not owe anyone anything.

 

If you think you may need help, contact Professional Debt Advisors to discuss your situation and how we can reduce your debts.  To receive your free consultation please fill out the form on the right or call us toll free at 866-559-3328 and inquire about our debt solution.  Protect yourself from the potentially bad results of a credit check run by your current or future boss.  Become debt free today!