Having a poor credit history can not only affect your ability to get a loan for a major purchase, it can also affect your ability to land a job that could improve your credit score.
Related: A quarter of Americans are debt-free
The National Financial Educators Council of Silver Springs, Nevada, knew that many employers checked the financial backgrounds of job candidates. But it wanted to find out more, such as whether the results of the check had an impact on hiring and, if so, how great the impact was.
Here’s what its survey of 1,100 U.S, adults produced:
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26 percent say they underwent a financial background check as part of a job or promotion inquiry.
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30 percent say they might have but weren’t sure.
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44 percent say they did not experience a financial background check as part of a job or promotion inquiry.
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5 percent say they have been rejected for a job or promotion as a result of the financial background check.
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18 percent say they might have been rejected as a result of the check.
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77 percent say they had not.
When the survey results were examined by gender, a bias toward older women emerged. Six out of 10 of those aged 35 to 44 report having their credit backgrounds checked as a condition of employment, compared to about half of women in the 45 to 54 age group. Women residing in rural areas are nearly twice as likely as those living in a suburb to say they had undergone such a check.
Companies can’t check someone’s credit history without their consent, the council says. But that’s not really an obstacle to doing a background check.
Citing a Society for Human Resource Management survey conducted in 2012, the council notes that nearly half of U.S. companies check credit histories for at least some job openings.
“The leading reasons companies reported for doing credit checks were to prevent theft or embezzlement, and to reduce legal liability for negligent hiring,” the council says. “Although the Fair Credit Reporting Act stipulates that employers must obtain prior applicant consent for a credit check, refusal to give such consent would likely cast the applicant in a negative light regardless of his or her credit background.”
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
