You need a job to pay the bills, but will your bills prevent you from getting a job? Fortunately for those who have missed billing due dates, fewer employers are conducting credit checks on job candidates than two years ago, according to a recent survey by the Society for Human Resource Management.
Fifty-three percent of firms say they do not use credit reports in their hiring process, up from two years ago, when only 40 percent did not use reports.
“Employers are paying additional attention to the way credit reports are used,” relates Mike Aitken, SHRM vice president for government affairs.
One reason firms tread carefully with reports (credit reports provide a detailed payment history, not a single numerical credit “score”) is that eight states now have laws restricting how a job applicant’s bill-paying habits can be considered, and many other states have considered enacting rules.
Since the recession, state lawmakers have heard from people who felt they couldn’t get a job because of credit, says Aitken.
But even if you’re not in a state with restrictions, existing federal rules already restrict credit as a hiring determinant, Aitken notes.
Specifically, an applicant’s personal credit history must have some relation to the responsibilities of the job. The top reason firms use credit checks is to prevent theft, according to the SHRM survey.
Moreover, applicants must be notified if the employer wants to pull their report.
Most employers allow candidates to explain credit missteps, adds Aitken, and the survey found that 80 percent of firms hired despite a negative credit history of an applicant.
Copyright © CTW Features