Dealing with Poor Credit and Background Checks

Employers may routinely check credit records and perform background checks even for those who won’t be handling money. Credit histories — called consumer reports — hold much more than payment history. A consumer report contains data from names of previous employers and residential stability to divorces and estimated prior earnings.

If you have poor credit or a large amount of debt, keep the following information in mind:

  • Employers are wary of hiring people awash in debt because they fear that stress will impact job performance or that you have inadequate management skills or even that you may have sticky fingers with the company’s funds.

  • Consumer reports have serious implications for students who graduate with sky-high education loans and credit card balances, especially if they or their families have missed payments. Divorced individuals may have interview-killing credit problems caused by the split-up and never know why their resumes aren’t delivering interviews.

  • Among consumer protections against unfair credit treatment is the requirement that employers must get your permission in a stand-alone document to check your credit (Fair Credit Reporting Act) — no blending the request into fine print in the employment application.

  • After an employer receives a report on you — but before any adverse action is taken, such as rejecting your application for a job — the employer must give you a free copy of the report with related legal documents. Receiving a copy of the documents gives you a chance to correct mistakes and clean up your credit record if you can.

Background checks are even more invasive than credit reports. They include records for driving infractions, court and incarceration histories, workers’ compensation, medical histories, drug testing, and more. For details, visit the Privacy Rights Clearinghouse (search on Background Checks).

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