You Have Bad Credit and a Potential Employer Wants to Check Your Credit History. What do You Do?

A few weeks ago, an individual wrote to the Worcester Telegram & Gazette for some job search advice. Like many affected by the recession, she and her husband were both unemployed for a significant period of time, and although she went back to work, they had to foreclose on their home. As a result, their good credit history was spoiled, but because the writer says she has always done her job well, this credit check practice is discriminatory.

In response, Joyce Lain Kennedy gives her the following advice: 40 percent of employers do not check credit history at all, but be prepared to be rejected from jobs involving money handling, know your rights, and only mention your credit history when asked to sign a background check release.

Kennedy’s advice is fairly accurate, but even if 40 percent of all employers do not check credit history, the remaining 60 percent may, and you need to prepare what to say if such a background check comes up. Credit checks, prior to the recession, were thought to be indicative of a person’s character: If you can’t manage your own finances well, how can we trust you to do the duties of the job, especially if they involve handling money? Worse, having poor credit has been associated with a greater likelihood of stealing from an employer. But, with so many laid off and out of work for more than 12 months, such assumptions are antiquated.

Even when preparing a statement for this employer to inform them of your drop in credit history, keep the following points in mind:

• Using credit checks as a blanket hiring procedure, similar to criminal background checks, is discrimination.
• Because blanket hiring based on credit history is discriminatory, some states are considering limiting credit checks or banning them altogether.
• You’re not alone. Most job seekers don’t want employers checking their financial history, either.