Should Your Credit Score Be Fair Game for Potential Employers?

A note from Nicole

Thanks to Dave Thomas for his timely and relevant post that hits home for me in a few ways.

1. I’ve had to get my credit checked as a stimpluation of employment during a job interveiw process.  I got the job and worked there for almost 3 years, but the whole process was a surprise to me and something that made me uncomfortable.   Thank God I was on top of things – getting your credit score in order isn’t something that you can remedy very quickly.

2. Since being laid-off/self-employed I can see how one’s credit score could tank during times of uncertain cash flow.  Hello occasional credit card dependence and cash flow paranoia.  For those who are job searching, have you taken your credit card use and general credit score into consideration?  Believe it or not it could make or break your next job opportunity.

3.  I’ve always struggled with trying to live within my means and staying organized with my bills which is why this month’s Ms. Career Girl Connect event is all about personal finance.  It’s a topic most of us don’t want to talk about but most of us really NEED to talk about. The event will have a panel of 4 personal finance experts (a mortgage broker, financial planner, insurance agent and realtor) who are going to get real and honest about women and personal finance.  If you haven’t registered yet, get your ticket here.  For those who are not in Chicago, we’ll be streaming the panel discussion and taking your questions live!

Nicole

Think your credit score will play a role in whether or not you get your next gig? Much to the surprise of many Americans, your credit score can play a role in an employer’s decision on whether or not to hire you.

The legality of whether or not employers can and should be allowed to use a credit score in the consideration of hiring someone has come under scrutiny in a number of states.

More Lawmakers are Standing on Side of Job Applicants

Lawmakers in 19 states and the District of Columbia have been taking steps to prohibit employers from reviewing an applicant’s credit report. Unless someone is under consideration for a job involving finances, doesn’t it make sense to avoid singling someone out as unworthy of working for a company just because their finances hit a rough patch over time?

To date, just Washington State and Hawaii have put in place law to protect job applicants, while Oregon approved anti-credit-check legislation earlier this year, with an exception for positions where fiscal matureness is tied to a certain job.

So, what can applicants with less than stellar credit reports do to avoid potentially losing out on a job because their credit history was revealed?

It is not uncommon in many interviews for the employer to ask a candidate to sign off on a form, thereby giving the company permission to contact one or all of the three major credit bureaus for the individual’s present and former credit scores.

For those individuals who have been out of work for some time now, it should come as no surprise that in many cases, they’ve been living to a degree off their credit cards. When that’s the case and there is no regular stream of good income coming in, it stands to reason their scores will take a hit.

How to Fix the Problem

In the event you are applying for a job and are asked to agree to a credit report, what should you do?

First off, know that not every potential employer is going to ask for such information. Unless you’re going to have direct access to a company’s purse strings, most will probably not care if you overspent on that new dress or went a little overboard on your last vacation.

Secondly, skirting the issue is like being asked to provide references or asking why you left your last job and not being able to satisfactorily deal with those matters.

If a business asks for permission to run a credit check on you, I would say go ahead. In the event you’ve been hit hard by the recession and/or had major credit card bills due to medical matter, divorce, etc. explain that ahead of time without going into great detail. There is a good chance the man or woman sitting on the other side of the table from you during an interview has had some financial issues of their own over time, so they should be able to appreciate your circumstances.

Lastly, even while financial times may be tough, do all you can to bring down any credit card debts, car payment loans, mortgages etc.

Most importantly, continue to your best ability to make on-time payments. One potential red flag for an employer is discovering that you’ve been late with payments on more than one occasion. The first thought that may pop into their head is what else will this individual be late with if I hire them for my company?

While it may not be a fair world we live in, checking one’s credit before potentially hiring them is becoming more common in today’s work world. Give credit to those who know how to handle the situation.

So, have you ever been asked to sign off on a credit report when interviewing for a job? If so, what was your reaction and did you ultimately get the position?