Does Your Credit Score Affect Your Chances of Getting a Job?

Does Credit Score Affect Your Chances of Getting a Job?
An increasing number of people are facing unemployment, all because their credit scores are not good enough for potential employers. Find out how a credit score can affect your chances of getting a job.
WealthHow Staff
Last Updated: Mar 19, 2018
"Someone loses their job, so they can't pay their bills - and now they can't get a job because they couldn't pay their bills because they lost a job? It's this Catch-22 that makes no sense." - Chi Chi Wu, National Consumer Law Center
When employers conduct a thorough background check on a potential employee, they also check the credit report of the individual. Most of us understand that certain fields of work, such as those dealing with national security and finance, require background checking so as to ensure that the credit history of the individual is clean.
However, did you know that employers from other domains of work also screen the credit card reports of their potential employees in order to judge their trustworthiness?

As per federal law, any employer or organization that screens an applicant's credit history for background screening is required to send a notice, known as adverse action letter, and copy of his/her credit report to the individual. The fact that many people do not receive such a letter, proves that the procedure is not being followed. Not many people are aware that their credit reports are being used as means to gauge their character, and not only adversely affect, but also reject their employability in the ever-shrinking job market.
How Does Bad Credit Hurt Your Job Chances
Having bad credit can severely hamper your chances of getting employed. Credit reporting bureaus offer their services to a large variety of buyers who are interested in finding out the credit scenario of employment candidates. Neither one wants to invest their money or hire a candidate who has bad credit history, and nor do they care to find out the reason behind the low or bad credit score.
Credit score on screen
Even people with many years of work experience to back them are finding it hard to get hired because of their unpaid bills, unforeseen expenses owing to a lack of health insurance, and due mortgage payments. Bad credit is bad news because it places the individual in an unfavorable position in the eyes of employers.
According to the 2012 survey carried out by the Society for Human Resource Management (SHRM), 47% organizations check the credit backgrounds of candidates. More and more organizations are following this method with the aim of decreasing and preventing theft, embezzlement, and reducing their own legal liabilities by avoiding negligent hiring of unsuitable candidates.
One of the things that can be done to prevent organizations from following this practice, is to refrain from checking the box that grants permission to look into your credit history. Secondly, you have the right to avail one free credit report every once a year from all the three big bureaus. Therefore, you will need to obtain a copy of your credit report from all three major credit services - TransUnion, Equifax, and Experian. Having the credit reports from all three sources will make you aware of your financial standing, and you won't be taken by surprise in case a company inquires about your credit discrepancies.
The Fair Credit Reporting Act gives every individual the right to get erroneous entries removed from their credit reports. The act also prohibits credit bureaus from making wrongful entries in any credit report. These are a few powers that can be used in your favor to fend off setbacks at an interview. You must ideally be checking your credit report before any employer can, and that means you begin checking your credit report before you set out for your job hunt.
Credit report
For those who are trained in the financial sector, their credit history will be scrutinized even more. Scoring badly in the credit report will seriously undermine credibility of such individuals, since they will be labeled as those who cannot handle their own finances and thus cannot be entrusted to manage the finances of others.
Currently, ten states have enforced laws that regulate credit reports for employment. These include the state of California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, and Washington. All of these states have restricted the amount of access an employer can have on a job candidate's credit history.