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StumbleSUN EDITORIAL:
A job seeker’s dilemma
Credit check by prospective employer can ruin an unemployed worker’s chance for a job
Thursday, Aug. 13, 2009 | 2:07 a.m.
A University of Illinois law professor has hit upon the ultimate Catch-22 confronting many unemployed people, whose prospective employers are apt to run credit checks on them.
“You can’t reestablish your credit if you can’t get a job, and you can’t get a job if you have bad credit,” he told The New York Times for a story that ran Friday.
The story highlighted the frustration of job seekers whose hopes soar when a company responds to their applications, but then get dashed when the company runs credit checks on them.
It is common for job seekers in this economy to have been unemployed long enough to have depleted their savings, rendering them unable to keep up with payments.
The Times reported that credit checks were once reserved for people applying for government jobs or for private positions that required them to handle money. Today, however, credit checks are routine.
An unemployed worker cited by the Times expressed bitterness after he learned that his poor credit was the reason a staffing firm wouldn’t hire him as a data entry clerk. “Why would they need to pull a credit report?” he said. “They’d need something like that if you were applying at a bank.”
The business perspective is that credit checks can reveal which job applicants might be reliable and honest, and which applicants might not be. But is that a fair standard now? Millions of people are out of work and, in many cases, their reasons for having poor credit are understandable.
Federal law states that a credit check cannot be run if the applicant doesn’t give permission (but how far will the interview go if he doesn’t?), and that prospective employers cannot deny an applicant a job based solely on a credit report without giving him an opportunity to explain.
But the law doesn’t guarantee fairness. Our view is that in this recession, businesses should tend to forgive an applicant’s credit rating if he is otherwise qualified.
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Taking credit reports at face value is a mistake. Literally a few seconds on Google revealed the following:
"Consumers find some 13 million inaccuracies on their credit reports each year..." You can confirm this and watch their video online at http://www.consumerreports.org/cro/money...
As many as one in four credit reports are wrong. http://uspirg.org/uspirgnewsroom.asp?id2...
Probably most relevant -- "Credit report errors may cost you a job" at http://money.cnn.com/2004/06/17/pf/debt/...
What on earth give a prospective meployer the right to check my credit in the first place? I
Every company I have ever worked for has ran a credit check and a drug test.
What gives them the right to do it is the credit release authorization you sign when you apply.
It's very common here in Las Vegas, especially in the casinos. They want to know they are not hiring people that are financially desperate enough to steal.
Which is fine when it's a position that involves handling money (such as in a casino or a bank), or a job that requires a security clearance.
But if all you're doing is pushing paper or answering phones, why does your credit score matter?
Not to mention that you can have an impeccable history, never late...but if the banks lower your credit limit (which they are doing to even the best customers), your credit score will drop because now you have less access to credit.
Doug,
They are not looking at your credit score or credit limits. They are looking to see if you pay your bills on time and honor your obligations.
People with credit issues often end up with wage garnishments and other legal actions that place undesired responsibilities and burdens on payroll departments.
I work for a very large company right now. We have offices all over the country and we get anywhere from 5-20 letters every single day that legally require research and responses, notaries etc. These are for employees that don't pay child support, owe taxes, have judgements against them, etc. Sometimes there are 3 or 4 correspondences for the same person requesting different information. It takes enormous amounts of time to address these issues, prepare notarized responses, and make sure garnishments are properly communicated to payroll. Then payroll has to go and spend hours each week making sure appropriate deductions are made.
It's a big deal they would like to avoid if possible.
the longer this recession goes on the less this will become an issue.
just about everyone is going to have bad credit before this is over.
Credit checks in employment are a Catch 22 for workers: you can't pay your bills because you don't have a job but now you can't get a job because you can't pay your bills!
A new website was recently launched to help people learn more about this issue, share their stories and take action to stop this discriminatory practice. Check it out at www.creditcatch22.org