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Employers Demand Credit Report from Applicants

By Faye Mergel
Published: Sunday, November 8th, 2009

For job applicants, having an excellent credit report is no longer an additional credential—it has become a necessity. With the still gloomy economic atmosphere, many companies refuse to hire an employee who is having trouble with his personal finances. But some experts say such practice is against the rights of consumers and unfairly discriminates people who are showing honest effort to fight their way back to good credit.

Employers Demand Credit Report from Applicants Careers specialists note that employers do not just want work histories, they also want to know the credit history of individuals who are vying for a position. Companies do more intensive screening on potential employees who will have access to cash, checks, and possible security clearance, according to Job 1 USA, a human resource company headquartered in Toledo, Oh.

Employers believe that individuals who are in need for money have a greater tendency to commit fraud. Experts add that companies see the credit report as a comprehensive overview of a person’s financial responsibility. This basically means that an employer wants to make sure that an employee does not steal.
Specialists say employers are keeping their guards up against negative and potentially negative aspects about a job applicant.

Once a potential employee signs up a document allowing access his credit report, an employer will be able to gain broad access to personal consumer information. Privacy Rights Clearinghouse says the area of inquiry could include Driving records vehicle registration, credit records, Social Security number; education, court, criminal, and incarceration records; sex offender lists, workers’ compensation, past employers, bankruptcy, character and personal references along with neighbor interviews; medical and drug test records; state licensing records, property ownership, and military records.

Specialists note that employers look for indicators of financial health when reviewing a credit report. But with banks, landlords, and insurance providers checking on a consumer’s credit every time he makes a credit transaction, critics say it is unavoidable that some rights are being violated.

According to them, the practice violates the right of consumers to freely make their decisions since those who refuse companies to do a credit check on them are automatically written off from the list of applicants, adding that the practice unfairly discriminates against poorer Americans.

A few months ago, lawmakers proposed a bill in the US House to ban employers from doing a credit check unless having a sound financial standing is strongly relevant to a work position.

A California legislator proposed such bill but was rejected by Gov. Schwarzenegger when it reached his desk a couple of months ago. However, advocates from several states keep  their hope high that through signature campaigns, employees will finally stop pulling out credit reports.

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