Employers Don’t check your Credit Scores

Video prepared by Greg Fisher at www.creditscoring.com a consumer watchdog……..

Debunking the myth that employers check your credit scores.

You’ve probably heard that you could be hired or fired based on your credit scores. This is a myth – one that has been perpetuated even in interviews with people who should know better.

The truth is, when an employer asks a credit bureau for information about you, the credit bureaus do not provide your credit scores, nor do they provide your date of birth. They provide a report showing your credit payment history and other facts about your use of credit. From that information, the employer can draw his or her own conclusions.

Since small, insignificant mistakes in credit usage can bring your scores down, this fact should be good news to job seekers.

Your employer or potential employer must obtain your permission before asking for this credit report, and if you are denied employment as a result, you must be given a copy of the report. This falls under Federal Trade Commission regulations. You can see details of the required steps at:  www.ftc.gov/bcp/edu/pubs/business/credit/bus08.shtm

Employment inquiries are not treated as credit inquiries in compiling your scores. So don’t worry if you’ve made application at several businesses, all of which have gotten permission to see your credit report. These inquiries don’t have an adverse effect.

Your credit report could be just one section of a more complete background check. But again, before purchasing any background information about you from a third party, your potential employer must have your permission.

This background check can be extensive – including everything from your medical history to incarceration records to workman’s compensation claims. Background researchers can even interview a job applicant’s neighbors in an effort to determine their character.

Some of this comes under Federal law, and some under State laws. You can get a complete overview of Federal regulations, along with advice on how to prepare for a background check, by visiting The Privacy Rights Clearinghouse http://www.privacyrights.org/fs/fs16-bck.htm#5

Why do employers conduct background checks?

In some cases, because they’re required. For instance, most states require criminal background checks for anyone who works with children, the elderly, or the disabled. Federal law requires background checks for certain Federal positions that require security clearances.

In other cases, the employer simply wants to be assured that he or she is hiring a person who can be trusted with money, or who is likely to be a stable employee. Others want to avoid the kind of employee who is habitually “hurt on the job” – filing claims for disability compensation.

Note that employees who are denied employment or fired due to background checks do have a right to see the reports that resulted in adverse action. However, employers sometimes avoid this requirement by claiming different reasons for not hiring someone. Especially in today’s climate, there are many applicants for the same job. They can merely say that someone else had better qualifications.

This disclosure is required under the federal Fair Credit Reporting Act (FCRA), which sets national standards for employment screening. However, the only background checks covered under the FCRA are those for which an employer has paid a third party.

Now that information is readily available on the Internet, some employers conduct their own informal research, and they aren’t required to get your permission.

Websites such as Facebook and MySpace are of interest to employers. A survey done in 2007 revealed that 44% of employers checked these social sites prior to hiring new employees and 39% used them to check up on current employees.

Job applicants should remember that everything they post on line is there for all to see, and doesn’t go away. It’s a bad practice to gossip about work or to make negative remarks about an employer – and a foolish mistake to post photos you wouldn’t want them to see.

It’s not just “formal” employers who check. I read recently about a real estate agent who was passed over for a house listing because the homeowner checked her Facebook page and determined that she “was a drunk.” Apparently, all the photos she had posted showed her with a drink in her hand.

Author:Mike Clover


One Response to “Employers Don’t check your Credit Scores”

  1. Harry says:

    background checks yes, but credit checks only for working with a financial institute.

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