Bad Credit and Background Checks

April 17, 2012 by  Filed under: Credit 

Background checks may seem to be a bit of a mystery to you, especially if you do not have a criminal record or some other factor in your past that may affect your being hired for a job at a company. However, you should consider the fact that there are many companies who will refuse to hire someone with a bad credit history and rating. Sometimes, having bad credit is just as bad as having a criminal record, because several companies will flat out refuse to take a chance on someone with a terrible credit history.

While it is prohibited for hiring companies to use bankruptcy as a reason to not hire someone, it may not matter because people who filed for bankruptcy likely had bad credit prior to doing so. In this way, there is a certain loophole for managers who do not want to hire job seekers with money problems and a history of bankruptcy.

You can have a completely clean criminal record, but if your credit report shows that you have issues handling your debts, employers may overlook you just as completely as if you were a convicted felon. The best thing to do is to keep your finances in control in the first place, so you do not run into problems with finding a job somewhere decent.

Job seekers in seven states can rest assured that the laws in their state restrict credit checks ordered by employers: Washington, Maryland, Connecticut, Illinois, California, Oregon, and Hawaii. These states have strict laws about running credit checks for a background check on a potential employee. Employers will only check out your credit history if there is a specific business need for it, such as the fact that you will have a corporate credit card or you will handle their money.

The problem with employers checking your credit, especially if you have been unemployed for a long time, is that you are probably behind on bills since you have not had a job. This causes credit problems, and of course, your credit can affect your chances of being hired, so you get stuck into a horrible vicious cycle of bad credit and unemployment and unsuccessful job searches.

The good thing to know about your credit history being looked at by employers is that there are some credit services like Experian which will remove information from the credit report, such as your marital status or your age. This is because prospective employers are not allowed to use this information in the hiring process. More credit companies should comply with this idea, because it helps to keep the hiring process as fair as possible.

The other good thing to know is that an employer will never check your credit without letting you know they will be doing so, which means you will not be blindsided by their questions later on, if they have any. Keep in mind that you should be maintaining your credit report with information that is accurate. Employers who encounter errors on the credit reports of potential employees tend to choose someone else to hire, because if they allow errors on something as important as a credit report, how many errors might they commit in the workplace?

Alexis Roth
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