Bad Credit Can Affect Future Jobs

Employment • Credit checks are being used by employers to view backgrounds of applicants.

By Mellani Lubuag
Daily Forty-Niner
Contributing Writer

Most students who own cell phones or have driven a new car off the lot are aware of the perils of a credit check, but only recently have these reports become customary in the hiring process.

Crystal Boteler, a junior, has some experience with credit checks. While purchasing a new vehicle she initially ran into some complications when the dealership learned she had no credit history.

"How do they expect you to create a credit history when you're not given the opportunity to establish credit?” Boteler asks.

In fact credit checking, a process which estimates the risk of lending money, is becoming more common not only in financial lending matters, but also in the job market. It serves as a sort of background assessment for prospective employees. Potentially, students seeking to enter the job market can now be followed by their credit histories.

Employers ranging from the United States Military to AAA use credit checks at some point in the hiring and promotional process. Those hoping to have a high security position in the military must first pass a credit check before a more intensive and mandatory security check is performed.

The same check is used by AAA, one of the major recruiters on campus. The association runs credit checks prior to the hiring of those seeking sales and financial positions in which large sums of money are handled.

Jim Doran, an HR consultant for the association, says that a credit check is used as a representation of the prospective employee's responsibility in financial matters Boteler agrees, "I could see why [employers] would want to do a credit check—you can tell how responsible a person is by how they manage their finances.” "I don't think a person without credit should be denied employment.”

Some consumer activists agree, arguing that a hiring process based on credit history is unfair for those with a tarnished past.

The Fair Credit Reporting Act mandates an employer get written permission by the individual before running a credit check. Employers must also disclose whether one's credit history was a reason for denying employment.