How a Bad Credit Score Can Affect Employment Opportunities

As the economy remains in a stalemate, job applicants continue to struggle in becoming gainfully employed.

The Labor Department’s monthly report on jobs was nothing to brag about with only a net 18,000 new payroll jobs being added to the economy.

Needless to say, the job market is highly competitive.

But job applicants may have to worry more about what’s on their credit reports than how their resume and job experience stack up. Bad credit can affect employment opportunities more than an applicant’s resume. Being late with credit obligations can cost you a job.

More employers are using credit reports as part of their applicant screening process. A great resume, good references and an interview are no longer the only determinants for many employers.

Even though there is no proof good credit employees worker harder or smarter than bad credit employees, employers insist on using bad credit reports to weed out applicants. If you are competing with an applicant with good credit and your credit is bad, the likelihood you will get as far in the hiring process as the good credit applicant is slim to none.

Once upon a time employers pulled applicant credit reports only when the career field involved handling money such as a bank teller, accountant, cashier or the job involved access to people’s home or property such as a police officer, firefighter or paramedic.

Now employers routinely use credit reports to “vet” applicants for just about any job. It has been stated by employers that credit reports help evaluate an applicant’s stability, revealing the amount of debt an applicant carries and whether an applicant moves frequently or maintains a stable residence.

Since 2007 many legislators have been working to get rid of credit checks as part of the employment process. The bad economy has prompted legislators in 18 states and the District of Columbia to introduce legislation aimed at limiting credit information in hiring decisions.

Hawaii, Washington, Oregon and Illinois have been successful in enacting actual legislation limiting employers’ use of credit information in hiring decisions.

If you are denied a job opportunity based upon information in your credit report, the employer must issue a “pre-adverse action disclosure.” The disclosure should include a copy of the credit report used in making the decision. The employer must give you the contact information for the credit bureaus which provided the credit report.