ANSWERS: 1
  • Keeping your credit in good shape is important for your financial well being. In some cases, it may even affect whether you get a job. There are several reasons why employers look at credit scores and a few reasons why it isn't always a good indication of employability.

    Characteristics

    Employers realize that having money problems is not necessarily an overall indicator of a person's reliability or honesty.

    Factors

    Prospective employers use credit score ratings as a part of the employment process. If other areas such as criminal records, job hopping or other indicators of instability exist, a poor credit score will add to the concern.

    Influences

    A recession makes a credit score even more important during a job search. Employers use that as a gauge during times when overall money shortages might influence an employee's morals.

    Type of report

    Credit reporting companies like TransUnion do not provide full credit reports to prospective employers doing an employment screening. It makes an "employment report" available that gives an overall scenario without specifics that might invade a person's right to privacy.

    Pitfalls

    There are pitfalls to the process of using credit scores for pre-employment checks. Young people, or those with fewer loans or debts, have inadequate histories to track and scores may not be a true reflection of creditworthiness, according to Matt Fellowes, who studies credit at the Brookings Institute.

    Other Areas

    Other consumer services such as insurance companies are using credit scores to determine applicants' eligibility or cost factors.

    Source:

    Boston Globe: Qualification: Must have a good credit history

    US News & World Report: Why Credit Scores Matter on Job Applications

    Privacy Rights: Employment Background Checks

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