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How free credit reports can be used to increase the employment potential

By Faye Mergel
Published: Thursday, December 9th, 2010

As more and more employers in the US are relying on credit reports to take a decision on employing prospective job seekers, obtaining a free credit report might become more necessary while applying for jobs.  This typically means that someone with a bad credit history would have little chance in securing a job.  Hence, it would be worthwhile to avail this facility that is offered free of cost and get to the bottom of the credit history.

Although there are heated debates about running credit checks on prospective employees by employers this is widely practiced in almost all states.  Employers feel that a credit history of a person will offer better insight into how well the employee will be able to manage finances as well as workload if hired.  However, employees are a disgruntled lot as they feel that this is completely unfair, as some of them might have some valid reasons for defaulting on payments and this is not an appropriate way to assess a person’s credibility.  For example, if the individual had suffered a serious setback due to an illness or a long period of hospitalization and hence defaulted on payments, this method of evaluating will damage their image.  Managing finances at the workplace is quite different from managing finances on the home front when things go out of hand.  However, employers feel that someone who is neck-deep in financial crisis is more likely to commit a fraud or indulge in money laundering and this would be a warning sign to most employers.  While this practice may be the right thing to do in certain scenarios, it may be very unfair in some cases.

As per the Equal Employment for all Acts, this move would go against the law as this would be considered a discriminatory move.  Some states have already said that this is an illegal practice.  While some employers feel that by engaging these individuals with a poor credit history they would be inviting trouble as there would be some amount of potential risk involved in hiring such individuals, there are those that feel that as long as there are no involvements in financial duties there should be no reason to run these credit checks on these individuals.  Hence the lesson to be learnt here is to be wise and obtain a free credit report once in a year and make possible amendments to keep up the credit scores.

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