Credit scores are now being included in many pre-employment background checks
. One survey showed that 35 percent of human resource departments are now using this information to assist in determining who they do or do not hire. The idea behind this is that those individuals who have good credit scores have demonstrated responsibility and are, therefore, the ideal employees. These individuals are viewed as more reliable and less likely to call in sick without reason or arrive late.
Another reason for the recent popularity of background checks
that include credit scores, is the fact these reports almost always list an individual’s previous residents and employers. With a large portion of the population falsifying or inflating their employment history, credit reports are now assisting businesses in weeding out the untruthful
Employers that require this information are looking for specific things such as a pattern of unpaid bills. Forgetting to pay an electricity bill once in two years is very unlikely to trip warning signals in an employer’s mind. That being said, repeated offenses will place a potential employee in a negative light.
For those with low credit scores this can be increasingly nerve racking, especially since it’s much harder to increase one’s credit without a job to pay the bills. Knowing what cannot be held against an individual in a background check can make a difference.
Although a history of unpaid bills can effect an employer’s decision on whether or not to hire and individual, businesses are not allowed to discriminate against anyone who has had to file bankruptcy. Doing so violates the Fair Credit Reporting Act and can be disputed. Negative credit information that is older than seven years will not effect one’s ability to get hired.
Sadly, lack of credit can be held against an individual. Although some individuals prefer to deal with cash and rent as opposed to buy, a completely blank credit report is seen as a strike against a potential employee by some companies.
If one is denied a position due to the results of credit information that surfaced during a background check, the company that request the investigation has let the individual know why. For some this may give the opportunity to clear up misrepresenting facts, such as how a pattern of unpaid bills was not intentional neglect but due to a long and severe illness or other serious circumstances.