Credit Reports May Impact Hiring Decisions

Credit reports can and sometimes do play a role in some hiring decisions. Only no one really knows how much influence they actually have, reports Portfolio's Kent Hoover.

That's part of what makes their use by employers so scary. The threat has escalated because negative information on credit reports has surged during these hard times. There's more. As many of you are well aware, credit reports are often full of inaccuracies. In addition, experts contend that what's on your credit report has little to do with predicting how you will perform on most jobs.

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The Equal Employment Opportunity Commission [EEOC] is looking into whether the powers-that-be who hire are using your credit reports to unfairly discriminate against you. Already the EEOC is the watchdog on discrimination based on race, religion, gender, age, or disability. Also, there is legislation in Congress that, if passed, will only allow your credit report to be used for hiring decisions in special cases. Those could be positions requiring a national security clearance.

Until the problem is addressed, what can you do? Here are some recommendations:

Check reports. Then bring them up-to-date. Check again that the revisions have been made.

Apply anyway. Even if your report has problems, still go after jobs, especially those you're particularly qualified for. Employers might opt for your good fit over anything else. So, put everything into how you apply.

Also, it's useful to know that the Society for Human Resource Management [SHRM] found that, despite the downturn, employers haven't increased their use of credit reports. And usually they do use them only for positions, such as handling money, where it would make sense to check.

Be ready to explain. Most employers give candidates they're seriously considering the opportunity to explain negative information on credit reports. Be ready to explain how this pattern does not reflect your usual attitude about spending. Keep in mind, many others who never expected to have "bad credit" now have to deal with this possible obstacle in a job search.

Jane Genova


Jane Genova began focusing on transitions when the academic market collapsed as she was writing her dissertation in linguistics and literature at the University of Michigan.  After re-establishing herself in the public relations industry, she gradually published on the subject.  Her first piece was on The Professional Woman in THE WALL STREET JOURNAL.  Since then, she co-authored the book THE CRITICAL 14 YEARS OF YOUR PROFESSIONAL LIFE and myriad e-books and articles on career subjects ranging from emotional intelligence to aging.  In the 1980s she attempted another change by attending Harvard Law School.  She didn’t complete the degree but channeled that experience into maintaining a legal blog [] housed at the Library of Congress.

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