For some job seekers, repeated rejection by potential employers may be traceable to an unlikely source: their credit report.
Regulators are cracking down on some of the methods companies are using to screen candidates (two major companies this week were accused of using background checks to discriminate against black applicants.) But employers’ use of credit checks during the hiring process is legal and fairly common.
Some 47% of employers conduct credit checks on job candidates, according to a 2012 survey by the Society for Human Resource Management. And one in seven job seekers has been denied work as a result of credit checks, according to a survey by Demos, a liberal think tank.
Employers are more likely to check the credit histories of applicants for positions with financial responsibilities, for senior executive positions and for jobs with access to highly sensitive employee information, according to SHRM. Other companies initiate credit checks when they’re worried about theft and embezzlement, the survey found. “People under financial pressure may not make the best decisions,” says J.T. O’Donnell, chief executive of Careerealism.com, a career-advice and job-search site. Red flags include missed payments, delinquencies, foreclosures and liens.
So what should job seekers do if they know something on their credit report might raise some eyebrows?