Looking for a Job? Check Your Credit Report

Many employers are looking at more than resumes these days when it comes to deciding who to hire and who to turn down. They're looking at job-seekers' credit reports.

Bad Credit, No Job?

It's true. Many employers use credit reports when making hiring decisions. And it's not always good news for people looking for work. Just ask Terry Becker.

Becker's toddler son became ill, and over a period of time, Becker had over $25,000 in medical bills - bills he was having trouble paying. When Becker's auto-mechanic business failed, he began looking for job. According to him, he was turned-down for at least eight jobs over a four-and-one-half year period.

For each of the jobs, Becker gave the employer permission to look at his credit report. One employer said that Becker's bad credit report made him fearful that Becker would steal from the company if hired. Naturally, Becker's of the opinion that his credit report is stopping him from finding work.

The Laws

Employers use credit reports because they tell a lot about potential employees. Are they responsible and pay their debts? Do they pay on time? If so, they'll likely take their jobs seriously and be at work on time. Getting a credit report is usually just another part or step of a pre-employment screening process.

Under the federal the Fair Credit Reporting Act (FCRA), employers are allowed to look at your credit report as part of the application process. They need your permission, though. And, if they base their decision not to hire you on that information, they need to tell you that, and give you the name of the credit reporting agency that provided the report. This is supposed to give you the chance to correct any incorrect information in the report.

The problem is, if job-seekers like Becker can't get jobs because of poor credit reports, how are they supposed to earn the money to get out of debt and improve their credit reports?

In some states - including Oregon and Becker's home state of Wisconsin - lawmakers are asking the same sticky question and are considering passing laws limiting or banning the use of credit reports in employment decisions. They're based on laws already in effect in some states.

For example, the law in Washington bars employers from using information in a job applicant's credit report in its hiring decision unless the information is substantially job-related. For instance, if the job involves handling money, like a cashier or bank teller, credit information is probably "substantially job-related." In theory, you might be pressured to provide information about robbing the business because you're under financial pressure.

Employers still need to get permission from applicants to get their credit reports, and they need to explain what information, if any, was used in the hiring decision. A similar federal law has been proposed, too.

What You Can Do

If you're looking for a job and don't like the idea of prospective employers looking at your credit report, the first thing to do is to contact your state lawmakers, as well as your US Representatives and Senators, and let them know how you feel.

In the meantime, here's a list of things to do while your job-hunting:

• Remember, you don't have to give an employer permission to look at your credit report. If you don't give permission, give a good reason, such as you think it's an invasion of your privacy, or you don't like the idea of your personal information - like your social security number and address - in the hands of complete strangers with no guarantee of security
• Get a copy of your credit report before you go on interviews or fill out applications. It's a good idea to check your credit report at least once a year to prevent identity theft, and you're entitled to a free one each year any way. If you need it, ChoiceTrust, which, like Lawyers.com, is part of the LexisNexis family, can help you get your reports today

If you know of problems in your report beforehand, you may be able to fix them or explain the problem to the potential employer:

• If you have negative information on your credit report or are having trouble keeping up with your bills, talk to your creditors. Sometimes you can work out payment plans or convince a creditor to remove negative information, all of which may improve your report and the chances of landing the job

Finding a job isn't always easy, and it's even harder when the economy is down and unemployment rates are high. Keep your head up, be persistent, and do everything you can to help make you stand out, including knowing what's in your credit report and how to fix it.

Questions for Your Attorney

• I can't get a credit reporting agency to remove incorrect information from report. What should I do now?
• Can an employer simply refuse to continue an interview and consider me for a job if I refuse to allow it to get my credit report? Isn't that some sort of discrimination?
• Once an employer has my credit report, what responsibilities does it have to make sure no one steals or uses my personal information on the report?