She Strengthens

The Hidden Barrier to Employment: How Credit Scores Can Affect Your Job Prospects

In the aftermath of the 2008 financial crisis, employers began to use credit scores as a way to filter out job applicants. This practice has continued to this day, with many companies using credit history to screen candidates and make hiring decisions. But what does this mean for individuals with poor credit scores?

A Bad Credit Score Can Be a Major Obstacle

Having a bad credit score can prevent you from getting hired, even if you’re fully qualified for the job. It can also limit your opportunities for advancement, regardless of your work performance. This is because credit history can be used to evaluate an individual’s reliability, responsibility, and trustworthiness.

What Shows Up on a Credit Report?

A credit report can reveal a lot about an individual’s financial history, including:

• Delinquencies
• Bankruptcies
• Judgments
• Liens
• Loans
• Mortgages
• Credit-card accounts

However, it’s not uncommon for errors to appear on credit reports. This can happen when payments are made late, but eventually paid in full. In these cases, the credit report may only show the late payment, without reflecting the eventual payment.

Limited Protections

Currently, only eight states have laws that prevent employers from using credit history in hiring decisions:

• California
• Connecticut
• Hawaii
• Illinois
• Maryland
• Oregon
• Vermont
• Washington

If you don’t live in one of these states, your only defense against credit checks is to refuse permission. However, this can be self-defeating, as it may harm your chances of getting hired.

Federal Protections

Federal law does provide some protections, however. Employers are not allowed to use credit checks for positions that do not involve handling cash or finances. However, this can be a limited protection, as many jobs involve some level of financial responsibility.

Fixing Errors on Your Credit Report

If you have errors on your credit report, there are steps you can take to correct them. You can:

• Request a copy of your credit report and dispute any errors
• Hire a financial consultant to help you clean up errors
• Wait seven years for the errors to be erased from your report

However, these options can be time-consuming and may not provide immediate results.

Conclusion

Having a bad credit score can be a major obstacle to employment. However, by understanding how credit scores are used and taking steps to correct errors, individuals can improve their chances of getting hired. It’s also important to be aware of the limited protections available and to advocate for changes to the law.