Lost Job Opportunities

You May Be Turned Down For A Job Or A Promotion

Believe it or not, the practice of reviewing a potential employee's credit record during the hiring process is becoming standard. Many companies also check their existing employees' credit history during the evaluation process. A bad score could keep you from being hired or promoted. In extreme cases, bad credit can lead to demotions or firings.

A Society of Human Resources Study reports that last year (2005) about 35% of the companies surveyed currently use credit reports when making hiring, promotion, or firing decisions, where as only 19% did in 1996. They claim the majority of credit histories are requested for new employees to verify past employment history, and are associated with positions that are finance oriented or involve the handling of cash.

While it is not likely a few late payments are going to negatively impact your career, more serious negative items may. Before entrusting employees with cash they typically check for more serious problems on their credit report, such as:

• Collections
• Tax Liens
• Several Late Payments
• Payments That are Excessively Late
• Skipped Payments

These types of issues can signal to a potential employer that the prospective employee is suffering severe financial difficulties that could lead to increased personal stress and poor job performance. Most employers do not analyze credit reports to determine how likely a person is to steal or defraud the company.

The good news for consumers is that employers need your permission in writing before running credit checks. Unfortunately, if an employer asks for this permission and you don't provide it, it's a pretty safe bet that you'll be turned down for that job. Federal law also prevents discrimination for employment because of a bankruptcy filing. However, companies often skirt this issue by pointing out the series of late payments or collections that lead up to the bankruptcy. If you feel that you have been discriminated against for this specific reason, contact a labor attorney about your rights.

If the company uses your credit history as an excuse for firing, not promoting, or not hiring you, they are required by law to inform you of the specific incident and provide you a copy of your credit report. They are also required to provide you with the name and contact information of the credit agency they received the report from.

Unfortunately a person in this situation has very little recourse if the information provided on the credit report is inaccurate. While the Fair Credit Reporting Act provides you the right to dispute the information and have it corrected, the time this process takes often does not fit in well with the employer's timeline for filling the position.

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