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Bad Credit No Longer a Problem in Job Hunts

Bad Credit No Longer a Problem in Job Hunts

Your credit history can keep you from getting a job.

For years employers have been pulling credit reports as part of the background check of potential job applicants.

“In the past only bank and financial institutions used credit checks,” said Amber Yoo with Privacy Rights Clearinghouse, “But over the years it has evolved so that more and more employers are using it to predict character judgments on people.”

Phil Blair with Manpower San Diego says a bad report could ruin a person’s chances of getting hired.

“You get one credit report back and it is a really negative one and you have two or three candidates to pick from, your tendency is not to pick the one with the negative credit check,” said Blair.

But while Blair understands why employers would look into a candidates financial history, he says it isn’t always fair.

“It is not indicative of the person’s ability or trustworthiness to do the job,” said Blair.

The credit report can include financial problems stemming from divorce, foreclosure, medical emergencies and more.

Starting in 2012 California employers will no longer be able to use those credit reports to judge a candidate. “It prohibits most employers from running credit checks on applicants unless it is substantially related to their job,” said Amber Yoo.

According to the new labor code employers can only use a consumer credit report if the person is applying for jobs like:

- A managerial position – A position in the state Department of Justice – A sworn peace officer or law enforcement position – A position where the person regularly accesses certain confidential information including bank or credit card accounts and social security numbers

California joins Connecticut, Illinois, Hawaii, Oregon, Maryland and Washington that have similar laws.

Amber Yoo says this change is the right thing in these tough times.

“Credit history does not predict job performance and so it is really unfair,” said Yoo.

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12 comments

  1. Helping-You-Hire

    As a Staffing Solutions provider http://bit.ly/vl32iM it is not standard operating procedure unless the individual will be in a finance department and have access to banking and financial records.

  2. That is good news; especially for a state that has such high unemployment rates and many people being out of work for a long time in which their credit has suffered as a result of it.

  3. Credit standing really has nothing to do with a prospective employee’s ability to do a job. Especially when you consider how many people have bad credit stemming from identity theft.

    The consideration in hiring someone should come down to one thing, are they qualified to do the job.

  4. Complete agreement! I know of many people that had amazing credit for years and years but then fall short because of a recent job loss resulting in foreclosure of their home! That is an unfortunate circumstance not a reflection of bad judgement or character.

  5. I learned something new today. Bad Credit – Good Credit as a predictor of an employees value was always grey at best. This is probably the better way go, and glad to see some states enacting the change in 2012.

  6. Sometimes all that bad credit goes back to a medical problem or a divorce and does not truly reflect the character of the person.

  7. Very cool. I may now be hirable. By someone other than myself.

  8. I hope this will be adopted nationwide. As your article points out, many individuals have problems that stem from circumstances beyond their control. People should not be disqualified for employment based on a credit report.

  9. It is good to see that more states are stepping into the 21st century. A bad credit report may mean the person is not trustworthy or it could mean a 100 other things and to not consider a person for a job just because of a credit report is doing the hiring company and the potential employee a dis-service.

  10. Thinks changes Bob. Interesting article that is also usefull.
    All the best,
    Jorge Purgly

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