As Unemployment Increases More Employers Use Credit Checks It’s seems to be getting tougher out there for Americans who are struggling financially, facing foreclosure and/or bankruptcy. According to an article in the Dallas Morning News, as millions of Americas face job losses, more employers are choosing to run credit checks on prospective workers. And what’s on a candidate’s credit report may affect whether they get the job or not.

The article said:

“Retailers and financial service companies in particular pay close attention to a person’s credit history because their jobs often involve employees handling large amounts of money, said Shank, who serves on the board of directors of a bank.”

And many employers are simply looking for a way to whittle down the vast number of applicants who are trying to find work after a job loss. For those Americans searching for a job and facing foreclosure, credit card debt or who have recently filed bankruptcy, credit checks by employers could make their situation worse by denying them the income they need to get back on track.  Many employee advocates are against the credit checks and want them to be restricted.

U.S. Rep. Steve Cohen, D-Tenn., is sponsoring legislation that would ban the use of credit reports for employment purposes, except in limited situations. Restricting the use of credit reports in employment will help even the playing field between those who are currently positioned well financially and those who have unfortunately succumb to financial crisis such as foreclosure or bankruptcy.  Besides, in most jobs, a person’s credit history is irrelevant to their ability to perform their job duties.

If you are facing an employer credit check and have less than stellar credit history, you may want to discuss this with the potential employer before they run the credit check. Make sure that you give a thorough explanation of why you had financial trouble and assure them that you intend to fix it.

Also be aware of your rights:

  • An employer must ask for your permission before they run a credit report.
  • You have a right to deny the employer access to your credit report.  However, if you deny them access to your credit report, they have the right to deny you an opportunity to apply for the job, saying that it is required to be eligible for the position.
  • Before an employer can deny you a job because of something on your credit report he/she must first provide you with a copy of the credit report and a copy of your rights under the law.