Employment and Credit Checks: What You Should Know

It might seem unfair, but potential employers might have the right to view your credit history when you apply for a job. This doesn’t mean every time you fill out an application the company can run a credit check, but many potential employers request permission from applicants to use a credit report as an evaluating tool. The good news is the way in which credit reports are used for employment decisions is transparent, so you’ll know if the reason you were not hired is your credit history.

Before 2012, any employer could request to view an applicant’s credit report, but now it is only legal in certain circumstances. For instance, if you apply for a job with certain financial institutions or you are applying for a certain position, it is still within an employer’s legal rights to run a credit check.

The change in the law means potential employers need some kind of justification for judging an applicant based on his or her credit. For instance, if an applicant will have access to credit applications or will be handling large sums of money, potential employers have the right to evaluate that applicant based on credit history.

Other instances in which an employer can use a credit report to make a hiring decision include when someone is applying for a managerial position, someone will be given access to certain confidential or proprietary information, or someone will be acting as a named signatory on a bank or credit card account of the employer, or is authorized to transfer money or enter into financial contracts on behalf of the employer.

The goal of checking an applicant’s credit is to ensure he or she is responsible with money and can handle the responsibilities of his or her job. Essentially, it must make sense for a potential employer to judge you by your “financial character” when deciding whether or not to hire you.

There is some evidence even these stricter regulations are hurting job seekers. Read about the economic effects of employer credit checks in this report by CNN.

What Should You Do If You are Asked for Permission to View Your Credit History?

If a potential employer asks to view your credit history, you might be nervous or unsure whether or not to grant permission. Aside from the general security risks of turning over personal information, you might also wonder if your credit history will affect the chances of you being hired.

First, ask yourself if the request makes sense. If you are applying for a job in which your credit makes no difference – you won’t be handling money, making financial decisions, or viewing anyone’s financial information – ask why the employer believes the request to be necessary. If there is a valid reason and you refuse to share your credit, you are likely facing the same fate as if your credit is less than perfect. With a rough credit history, your best bet is to be upfront with your potential employer about your mistakes and hope for the best.

If there is no valid reason for viewing your credit and you believe you are being turned down for a job because you refused to share your credit information or because you were judged inappropriately based on your credit, you might have a right to file a claim against the employer. The important thing is you learned before accepting the position that the business doesn’t always adhere to rules and regulations. Despite missing out on a job, you are likely keeping yourself out of a shady situation in the long run.

For more information on how employers can use your credit report or to speak to someone about a situation you believe could be breaking the law, contact the Law Offices of Robert M. Geller at 813.254.5696 to discuss your situation.