Credit Report News, Tips & Advice
Website CertifiedPrivacy Protected
Credit Report News, Tips & Advice « Credit Reports > Credit Report News > Specialists Explain About Pre-employment Credit Check

Specialists Explain About Pre-employment Credit Check

By Faye Mergel
Published: Wednesday, October 28th, 2009

Many debt-troubled consumers are finding it difficult to find work. This is because employers pull out the credit report of potential employees as part of their screening. More and more job applicants are getting confused by the practice, prompting employment experts to launch consumer education programs to help Americans get back on their feet after the recession.

Specialists Explain About Pre-employment Credit CheckAs noted by experts, most employees want to know an applicant’s financial ability and debt status. Employers believe that having an excellent credit history is an important qualification, especially for positions which include handling large amounts of money or access to sensitive information. The idea is that if a person cannot manage his finances well, he will be most likely perform poorly for the company. An excellent debt status is also seen by companies as an indication of personal responsibility. Experts say more cynical employers believe that debt-trouble employees are likely to steal from corporate funds to fill the gap in their finances.

Specialists remind consumers that credit reporting agencies (CRAs) collect and compile information about a person’s credit activities and make them available to businesses, including credit card companies, banks, employers, landlords, and others. Business organizations and individual creditors can access a person’s file with the CRAs only if they ask permission from him.

Experts say employees usually ask applicants to sign a document which gives them legal access to consumer reports. An applicant may choose not to waive his privacy rights but it will most likely put him out of the contest for employment. Experts advise consumers that employers who do pull out credit reports without permission are violating the Fair Credit Reporting Act (FCRA), a federal law which regulates the use of consumer information. But they tell consumers that government agencies such as the FBI and CIA may scrutinize consumer reports without asking for permission from individuals when granting security clearances.

To date, there is no federal law yet which prohibits employers from rejecting an applicant on the basis of his credit report. However, experts tell consumers that they must be warned if their information will be used against them. If employers choose not to hire a person or a promote current employee because of their credit information, the employer is required to provide the party concerned with his report and inform him that he has the right to challenge the report.

Specialists warn consumers that some information on their credit report may not be accurate. They cite identity fraud as the most common reason why many consumers are seeing negative items in their accounts which do not belong to them.

Consumers are advised to challenge inaccuracies through guidelines set by the Federal Trade Commission.

No Comments

No comments yet.

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.