Bad credit can affect job search

Consumers with bad credit have likely realized that their score can affect their ability to be approved for a credit card, mortgage or car loan. Many don’t expect that their low score could cost them a job.

According to the Kansas City Star, many employers are using credit checks as a way of determining a customer’s reliability. While the tests are far from the only factor in hiring, employers who use the tool say that they do put some stock in it.

The Society for Human Resource Management says that about 20 percent of employers use credit checks as a measure. Of those, 57 percent test after a contingent offer, similar to a drug test, while 30 percent will do them immediately after an interview. The group recently testified before Congress, saying that credit scores are a good tool to “assess the skills, abilities, work habits and integrity of potential hires.”

Congress is currently debating whether to add an amendment to the Fair Credit Reporting Act that would ban the practice in the majority of cases. Some states, including Illinois, Oregon, Hawaii and Washington, have already passed a similar measure.

The use of credit as a judge for loans and jobs can be frustrating for those struggling economically. Fortunately, they can take comfort in the fact that they may be pre-approved for a car loan regardless of their bad credit history.