Does Poor Credit Stop You From Getting a Job?

Bad credit can make getting a job difficult, but you have rights as a job candidate and consumer. Employers may use a credit report when considering you as an employee to determine your trustworthiness, and you might lose out on a job if your credit history is poor. An employer who uses a credit report to deny you employment must tell you that the report cost you the job.

Features

Employers who use credit checks inform you of the requirement during the hiring phase and ask you to a sign a disclosure allowing the credit bureau to release the information. After you have signed the disclosure, the employer supplies your personal information to the credit bureau and orders a typical credit report or a special report designed for employee screening. Both types of report show debts, delinquencies and other negative credit actions, but employer reports typically do not show account numbers and have more streamlined credit information and credit analysis.

Effects

An employer can refuse to hire you based on the information in your credit report, even if you are otherwise qualified for the job. Although bankruptcy does appear on your report, the employer cannot refuse to hire you based on the filing under federal law. However, since most people who file bankruptcy are already carrying debt, the credit report still shows an adverse credit history, and the employer can use the history as a reason to not offer you a job.

Considerations

An employer who did not hire you because of your credit must give you a copy of the report they used before making a final decision, along with a summary of your rights. The employer will also give you a second notice that identifies which bureau the report came from and a statement detailing your right to dispute the credit information.

Checking your credit reports yourself, before applying for work, can help you avoid problems. You can dispute inaccurate entities, such as a paid debt or someone else's account, to clean up the report before an employer looks at the information.

Misconceptions

An employer can run a credit check on current employees with written consent; the practice is not limited to new hires. You may get a job by passing a credit check at the time you are hired but lose out on a promotion or a new assignment because of credit problems later.

Not all states allow employers to run credit checks freely. For example, both Oregon and Illinois restrict what types of business can use credit checks during the hiring process, with government and financial jobs typically exempt.