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Job Applicants Advised to Check Report First

By Faye Mergel
Published: Friday, October 2nd, 2009

Companies increasingly pull out credit report of potential employees before granting a position. The percentage has risen significantly in the last few months, which is why career specialists advise job applicants to do credit check first before sending their resumes.

Job Applicants Advised to Check Report First As of February this year, 43 percent of employers check the credit report of current and potential employees for overdue payments on mortgages, credit cards, student loans and rent. The Society for Human Resource Management says that the significant increase made it more difficult for unemployed consumers to get a job which would have finally helped them overcome their debt problems. Back in 2004, only about 34 percent of US companies practice employment credit check.

In a more recent survey funded by a private organization, one in sixteen human resource managers do the same check on job aspirants. 214 people participated in the study. Analysts say that percentages could be way greater nationwide.

According to the Fair Credit Reporting Act (FCRA), employees can only check the credit report of a job aspirant if the person concerned waives his privacy rights. Unfortunately, employers make applicants sign a document which gives them the right to peek into a person’s document with the bureaus.

A company may deny employment to a person on the basis of credit report since there is no law yet that denies the practice. However, a job applicant must be sufficiently informed that he is rejected due to his poor debt standing.  On a brighter note, Congress is proposing a bill that will fully prohibit the practice which is perceived unjust by a huge number of critics.

Representative Steve Cohen of Tennessee is pushing a legislation that aims to protect consumers with bad credit. If turned into law, the exemptions will only be given to government organizations and finance companies.

Since there is no federal law yet that bans the employment practice, career specialists advise consumers to be more mindful of their debt management in the meantime. They also remind consumers that regular check prevents frauds from accumulating in their account. Cases of identity theft have greatly risen as of late, with 10 million victims last year alone. Specialists advise consumers not to let fraudulent items get in their way of getting the job they need.

There are some employees though who disregard credit reports. They say that it is natural for applicants to be caught in debt troubles due to recession. Nonetheless, career experts tell applicants to value their credit reports as much as they value their resumes.

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