Imagine being unemployed, falling behind on your bills, and getting turned down for a job because your credit now stinks. It seems so unfair. Shouldn't our personal financial situation be private?
Whether we like it or not, about 60 percent of employers are using candidates credit reports in the job screening process. There are real examples of employers who are turning away a job candidate in favor of another, less qualified one, with a cleaner credit report.
Employers use credit reports to screen workers because they say they believe it allows them to predict future behavior based on their financial history. They believe checking credit reports ensures applicants are leading honest lives.
“It’s easy to put on a façade, but a credit report doesn’t lie. It’s a credible source to use to get to know an individual,” Joey Price, a human resources specialist with TW & Co., a security firm told Workforce Management.
But now there's a Catch-22. Some candidates theses days are out of work for months and may find it hard to avoid racking up debt and fall behind in paying bills. And there are other things that factor in, too. A low credit score also may not indicate anything about job performance if debt problems resulted from a major event such as a divorce or expensive medical procedure.
Four states have ban the practice of allowing employers to check credit reports —Hawaii, Oregon, Washington and Illinois (effective Jan. 1, 2011)—and 15 other states have proposed similar legislation.
Would you be okay with a future employer scrutinizing your credit report? Do you think it's an acceptable part of backgrounding a potential hire? Or do you feel its personal and not relevant to your ability to perform well in a specific job?