Save Money / Consumer News
Does bad credit equal a bad employee?
LOS ANGELES (KABC) -- How do you feel about your boss getting a peek at your credit history? If you're looking for work it's very possible you'll be asked to share that information in order to get the job. But there's a move under way across the country to stop that from happening.
Most Americans don't like the idea of someone else looking at their credit report. Congress is considering a bill that stops that from happening.
Job-hunter Lauren Beer has experience, she has skills and she has advanced degrees from prestigious universities. But she also has not-so-great credit, and she says it is costing her job opportunities.
"There are millions of people out of work, suffering and depression are on the rise," said Beer. "Why in God's name are we putting another impediment in the way of job seekers?"
Beer is finding out the hard way that employers care about your credit. Some even require credit checks as part of the application process.
But not everyone agrees with the policy. There's a bill in Congress that would prohibit the use of credit checks when it comes to making a hiring decision, with a few exceptions, that includes people applying for a national security position or a job where they'd handle large amounts of money.
Tennessee Representative Steve Cohen (D) proposed the legislation.
"You don't have a job, you lose your house, you have your medical debt and before you know it your credit rating is gone in no time. People who want a job are being denied through no fault of their own," said Cohen.
The real question: Does bad credit equal bad employees? Studies are mixed.
James Ratley, president and CEO of the Association of Certified Fraud Examiners, sees a need for credit checks to protect companies. He says their research shows the wrong employees can be devastating to an organization.
"When someone is having financial difficulties themselves they are much more inclined to take money that does not belong to them. Employee credit checks for potential employees are a vital part of the hiring process," said Ratley.
Bad credit is becoming more common in this economy and could be caused by a number of things that may not be in your control. And if that's the case, be prepared to explain it. Keep in mind the employer cannot see your credit report without your permission. You have to authorize that. But deny them and your application may not make it to the next step.
It's important that you know your credit and fix any errors. Remember, every year you can get a free copy of your credit report from each of the three credit reporting agencies.
save money / consumer news, ric romero
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