Check Your Credit Before Your Employer Does!

A recent report revealed that this year saw a 7% increase in the number of employers conducting credit check to shortlist their potential employees.

You have an excellent resume and are confident that any of the applicants are not even half as skillful and presentable as you are but to your surprise, you are REJECTED. Yeah, that word pierces deep inside and blows your self-confidence terribly when you knew you were a perfect fit for the job but cannot seem to figure out what went wrong when you impressed the jury to no end in an interview?

Ever considered the thought of a bad credit report? Yes, employers nowadays has become a lot more diligent in hiring employees and being just exceptionally skillful and qualified for the job may not be enough in many cases.

You must have a sound credit report to prove that you are a financially responsible person in your personal life too, and are thereby capable of taking good decisions and can handle the finances of the company with due consideration of various factors, like budgeting, taxation, et al.

Credit Report Access of Potential Employees by Future Employers – Is It Fair?

It may seem unfair but sadly, the system does not work this way. Despite, all the criticism by thousands of employees and experts about the unfairness of checking credit reports for employment, it has been found that an increasing number of employers check the credit reports of applicants before the applicant is appointed for the job.

These employers are not alone in their belief that a bad credit indicates a financially irresponsible person. Even though, this belief may be correct to some extent, it is not right to tar all job applicants with the same brush.

In some unfortunate circumstances, credit checks are conducted after you have accepted the job, and poor credit history may cause you to lose the job immediately.

Should they continue with this belief? Prospective employers have several reasons to argue their justification about checking credit reports. This is the reason why each US state use their own discretion to allow or disallow the permission to employers to chck the credit reports of their prospective employees. While some states have banned this practice by law, many states still do not see it as an unfair demand on the part of employers.

Just when you believe that you have bagged the job and all your woes are about to come to an end, you find that you have been eliminated from the selection process, as it is at a very later stage of the recruitment process that your credit reports and background checks are done.

Be Aware of Your Rights

If you have provided your prospective employers with your social security number, check your credit report before they do. You will know what the negative items are that can ring death knell for your chances at securing the job.

If you know that there are negative items in your credit report, talk to your employers about your genuine problems before they find out from the report and draw their own conclusions.

Prospective employers require your written permission before they can access your credit report. Therefore, be aware of what documents you are signing. If you have given them permission to conduct a background check, know that it also interprets to be your written permission to retrieve your credit report too.

Although, employees must be informed if the reason for their being rejected is due to the credit report, very few employers do so. They assign other reasons and in most cases, there is nothing you can do about it. Fair Credit Reporting Act (FCRA) gives you a lot of rights but if the background check on you was conducted though independent sources, there is nothing that FCRA can do about it.

H.R. 3149

However, don’t lose heart. In the recent past, after recession hit, a bill was introduced and is awaiting the approval of the Congressional Committee. If approved, all your troubles will come to an end as the bill would restrain employers from using bad credit as a reason for rejection.

Review and Fix Your Credit Report

While waiting for the bill to be approved, you can resolve this issue by taking steps to clean up your credit report. The first step is to access your report and review it. When you review it, items responsible for the bad credit will be visible. If you find that they are wrong, dispute them with the bureau. You may also find an item that is indicative of identity threat. That is indeed a cause of worry and warrants immediate action.

Since you have been rejected for the job due to bad credit report, there will be negative items that are correct and genuine. You have to work painstakingly to remove those items. Be careful with your finances and the way you handle them. Remember that all mistakes appear on your report.

One last word of caution! Be wary of credit repair companies that promise overnight credit repair. It would be nothing short of miraculous and where your report is concerned, there is no such thing as a miracle. You will only end up losing money.