Bad Credit May Cost You the Job

If you’ve had a hard time landing a job, it could have something to do with your credit history.  According to a recent articleon CNNMoney.com, more and more employers are using credit checks to screen job applicants.  A new survey by the Society of Human Resource Management revealed that 60% of companies are using credit reports when making hiring decisions.  This is an increase from the 35% that reported using credit checks in 2003.  Employers look at things like delinquencies, level of debt, bankruptcy and incidents of foreclosure to determine a candidate’s ability to handle responsibilities.

This recent trend has made it increasingly difficult for unemployed workers to find worthwhile opportunities.  Because of the current economic climate, citizens are having a hard keeping up with their bills and this can negatively affect their chances of finding new jobs and establishing financial security.  According to Nat Lippert, an analyst for the organization “Unite Here,” unemployed workers are getting caught in a downward spiral.  “You get in a Catch-22,” says Lippert.  “You can’t pay your bills because you don’t have a job, and now you can’t get a job because you can’t pay your bills.”

Unite Here has been pushing to pass laws that limit the ability of employers to use credit checks when hiring.  Thus far, three states - Hawaii, Oregon and Washington - have passed legislation that makes it illegal for employers to use credit reports unless they can demonstrate its relevance.  Sixteen other states are working on similar bills.  Yet companies are fighting against these regulatory laws.  Stuart Pratt, CEO of Consumer Data Association, believes that credit reports can be an invaluable resource to employers when determining whether or not a prospective employee can handle their job duties.  “Pratt also argues that the credit histories are only one factor considered by employers, and that prospective employees are supposed to be given the chance to respond to what their credit check turns up.”

However, consumers are still concerned over the importance being placed on credit reports.  And consumer advocates are looking for ways to help workers raise their credit scores and try to get a leg up in a down economy.  For more info on this latest job hunt hurdle, click here.