Should Employers Check Your Credit?

September 11, 2014 | | Queens Chronicle |

A bill that aims to “prohibit discrimination based on one’s consumer credit history” by banning employers from doing credit checks on job applicants will be the subject of a City Council hearing set for 10 a.m. Sept. 12 at City Hall. [...]

According to an article by Amy Traub titled “Discredited: How Employment Credit Checks Keep Qualified Workers Out of a Job,” the practice of checking credit on prospective employees is legal under federal law.

The article says The Fair Credit Reporting Act makes it legal for employers to ask applicants for their credit information on their job application as well as any current employer. In order to check credit, the employer must obtain written information from whose ever credit they wish to see. Also, employers must notify individuals before taking any “adverse action,” such as promotion, failure to hire, or retain current and prospective employees.

Although the practice is legal, it is difficult for future employees to opt out because employers have the right to reject their job application if the person refuses to consent to have a credit check.