Pre-Employment Credit Checks Can Cost You a Job

Did you know when a company is considering hiring you, they will likely make a decision based on your credit record? Make sure you know your legal rights rights as to your credit record, when you’re interviewing for a job.

Pre-employment credit checks make sense if the job involves handling cash or company secrets. But in many cases it’s just companies snooping because they can. More than half of all employers conduct credit checks on job applicants, supposedly checking your character, judgment and reliability.

But the reality is that anybody can have legitimate credit trouble because of a medical emergency, the death of a spouse or a bad divorce. None of these situations should rule you out from getting a job.

Employers are known to use credit checks to discriminate. Some employers actually seek out people with bad credit, hoping their new hires will be so desperate that they will keep working no matter how bad the job is.

If an employer runs your credit history without your written permission, they’ve broken the law, under the Fair Credit Reporting Act. Ten states have outlawed the use of credit histories in employment decisions. Check with a local attorney at to find out the law in your state.

Four kinds of information will be viewed negatively in the hiring process:

A court judgment against you
Active accounts in debt collection
High debt compared to your income.

If it’s possible, clean up the black marks in your credit record. Otherwise, you can tell human resources in advance that you’ve been through a bad time financially. It shows you’re being honest.

The employer has to tell you in writing if they deny you a job because of a credit report and they have to tell you the agency that issued the report. If you think it’s a smokescreen to discriminate against you, you should talk to an employment lawyer who represents workers.


7 thoughts on “Pre-Employment Credit Checks Can Cost You a Job”

  1. When would it make sense? WTF Does it have to do with the JOB!!! Total BULLSH*T Just an excuse to keep people out or keep pressure down for better working conditions.

  2. 1:24 "If an employer runs your credit history without your written permission, they've broken the law."

    The current application process is a Catch 22. Most, if not all, applications are done online, and the way employers get around laws that ban credit checks is to require you to consent to a BACKGROUND check before you can continue with the application process, and in most cases, a consumer report is bundled in with the background check. With a single check, you consent to both, with no option to refuse the credit check. Failure to consent results in termination of the application. So, if you even want to be able to finish the application and submit it in the first place, you have to give them permission to run a credit check, at which point you essentially forfeit your right to contest an adverse result.

  3. I doubt a potential employer will tell you that they are denying you a job because of your credit report, they'll just say that you're not qualified. You won't even know why and have a chance to explain.

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