Credit checks could hinder job-seeker potential

Credit Scores and Job Hunts


Before many people start scanning the job market, a recent national survey shows how some prospective employees should look-over their credit score.

The survey done by the Think-Tank Demos show one out of every four unemployed Americans have been required to go through a credit check when applying for a job and one out of 10 have been denied jobs because of this.

Regional economist from the Idaho Department of Labor Dan Cravens explained how this is not as big of a problem in the area as it is on a national scale. He said many employers are performing this credit review as another form of a background check.

"A lot of times an employer will look at a credit report to see: have you been sued? Have you gone through a bankruptcy? Do you pay your bills on time?" Cravens said. "Basically, they are using it as a way to check for one's character, honesty, and integrity."

Cravens also said this becomes an issue when people apply for a job requiring a large amount of trust such as handling a large sum of money or someone's confidential information.

Phil Meador Toyota general manager Jason Meador agrees this check should be done only when necessary. He performs background checks only on those who apply for management positions since they have access to large amounts of cash, and said performing this credit report check on any of this other employee applicants would just be a violation of privacy.

"That's the type of person we would run their credit because we're making sure this person, if they are going to handle the store's money, we would like to know they can handle their own money first," Meador said.

Meador, along with many other employers, say this notion of performing background checks too extensively acts as a sort of Catch-22 because some people get laid off, accruing unpaid bills, and hurting their credit score as well as their chances of getting hired.

Many students are also worried these background checks will hurt them when it comes time for them to enter the workforce with piles of their student loans looming overhead.

However, some students are also concerned that not having a credit score and starting out with a blank slate will be just as harmful.

"It kind of terrifies me," Idaho State University student Emma Doupe said. "I quite literally have no credit score, and if an employer sees that, they will make certain assumptions. But they don't understand I have not spent my time paying for a car payment or a credit card bill...and I think that might make me look even worse."

Cravens also advises those who are thinking of entering the labor force to check their credit scores for free at the website:

According to the Fair Credit Reporting Act, employers must properly notify potential employees they are, in fact, checking their credit scores.

Follow Kaitlin on Twitter: @KaitlinLoukides

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