The Great Recession has been brutal for many, including those who were laid off and are looking for new jobs. As I mentioned in a previous post “Where are the jobs?, jobs are difficult to secure because there are many more applicants than job openings.

Let’s assume that you have performed all the requisite tasks for getting a new job; you have a great resume, you have practiced your elevator speech to perfection, a background check has been completed, you are networking and have a growing list of LinkedIn connections, your suit is pressed and your shoes polished – you feel ready to give it your best shot. Not so fast, there may be one more thing that you need to address and that’s your credit report.

While credit checks historically were used to screen applicants for financial and government jobs, the practice has spread. More than 40 percent of employers run credit checks on job candidates, according to some research. Rep. Steve Cohen, who introduced the bill, points to a report that a third of workers making less than $45,000 a year have poor credit scores linked to bankruptcies, loan delinquencies, divorce, medical problems, or unemployment.

Should Your Credit Report Cost You a Job?

Read some of the comments in the above article and see just how pervasive credit checks are in the hiring process and how demoralizing it is to the job seeker. Should you be judged by your credit report in an economy that is seeing record foreclosures and increasing bankruptcies? Should you be judged by a credit report that’s been tarnished due to unpaid medical bills forced by losing your expensive health insurance? Most people would think not and that’s why Congress has introduced legislation to limit the practice. H.R. 3149: The Equal Employment for All Act looks to prohibit employers from using credit reports in hiring decisions, except for financial firms, government agencies and positions requiring security clearance. As of this writing, it looks as though the process is moving very slowly. Another reason to contact your congressional representatives!

So don’t forget what you are entitled to currently under the law:

There are existing safeguards on the credit screening process. The Fair Credit Reporting Act—which the new bill would modify—requires employers to notify candidates that a credit check may be involved in the hiring process, and candidates must authorize the credit checks. It also requires employers who, based on the report, would refuse a new hire (or, say, deny a promotion) to give workers a copy of the credit report and notify them of the company’s plans. Individuals then may dispute the accuracy of the information in the report, as many credit reports contain errors.

Should Your Credit Report Cost You a Job?

This following quote from a NY Times article puts it into perspective:

“How do you get out from under it?” asked Matthew W. Finkin, a law professor at theUniversity of Illinois, who fears that the unemployed and debt-ridden could form a luckless class. “You can’t re-establish your credit if you can’t get a job, and you can’t get a job if you’ve got bad credit.”

Another Hurdle for the Jobless: Credit Inquiries

It may be wise to review your credit report in advance, so you can dispute inaccuracies.

Some consumer groups say one in five credit reports contain factual errors. So before someone else’s mistake sinks your job, get to your credit report, check for errors and dispute anything wrong.

Your Career: Credit reports play important role for employers

If you do see credit report errors, you can have them fixed: How to Fix Credit Boo-Boos

You are entitled to a free credit report every 12 months, and that free report can be obtained at: Annual Credit Report.

In this difficult job market, there’s no such thing as too much preparation.


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