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4 Reasons Credit Should Not Matter for Employment

It has become somewhat of a requirement for many employers to run a credit check of applicants, alongside their background checks. They do this as a way to show what a person’s history with finances is and to determine if they can work around money. It is often done for jobs in banking and financial industries, but other employees have been doing it as well. However, there is some controversy over it and studies show it isn’t very effecting at judging someone’s trust and character. Many states are now banning the use of credit checks to hire employees, including California, Hawaii, Oregon and Washington. These four reasons are the top reasons a person’s credit should matter for their employment.

1. Credit Doesn’t Equal Trust

Employers often run credit checks to determine whether someone is trustworthy, but in terms of employment, it isn’t a very good indicator. Not being able to pay past bills may show their financial struggle, but it doesn’t necessarily show a lack of maturity, financial responsibility, or lack of trust with money. Many people with a low credit rating simply suffered the same financial hardship as thousands of other people in the US after the recession and even before.

2. Credit Issues don’t Identify Financial Criminals

Another common reason an employer will run a credit check on their applicants is to find out if they might be more willing to commit a financial crime. It is a false accusation that someone with financial problems would be willing to commit a financial crime at their employer, which nixes this reason right away. Credit is not a good reason not to hire someone because the employer fears the worker will steal or embezzle money from them.

3. Look at the Broader Picture

As mentioned previously, a person’s credit doesn’t show their responsibilities or ability to perform a job properly. It doesn’t define their educational background or work experience either. Look at the big picture when considering a job applicant. If they do have a low credit score, give them the opportunity to explain what happened. In most cases, they were affected by the economic crisis, lost their job unexpectedly, and had trouble paying some of their bills.

4. Invasion of Privacy

Finally, running credit checks on job applicants can be viewed as an invasion of privacy. You are hiring employees, not giving them a loan or a credit card. It is an invasion of their privacy by finding out what their financial and credit history is just for employment. This is one of the main reasons some states in the US are banning credit checks as a basis for employment.


Dave Greene
# Dave Greene
Thursday, May 8, 2014 7:11 AM
What can you do about it or how can you prove it?
Tuesday, June 24, 2014 10:42 AM
Sorry Dave, I don't exactly understand what you're saying here.

If you're asking what you as a job hunter can do about it? You can support legislation in your state that bans this practice. You can also reach out to your senator and congress-person and let them know your feelings on the issue.

As for proving it-- look for soft credit inquiries on your credit report.

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