Protect the Unemployed from Abusive Credit Inquiries

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The practice of employers checking job applicants’ credit before agreeing to hire them for a position is becoming more common than ever – and in many cases, is abusive. So why is it happening? Why are employers taking it upon themselves to check your credit as a way to decide whether they want to hire you? We’ll take a look at this concept, as well as ways that you can protect yourself from this happening to you.

Why are Employers are Checking Your Credit Reports?

Did you know that according to a 2006 survey by the Society for Human Resource Management, 43% of employers were using credit histories as a way to screen for employment. That’s almost have of those surveyed! So why are they doing it? Some employers are equating an applicant’s ability to manage credit with an ability to handle responsibility on a job. While it’s a rather clever screening tool, in many cases, this act is actually illegal. Employers are finding ways to bury the credit check approval form within other information so that you don’t even know that you’re agreeing to give your private information away.

What the Government is doing about the issue?

Many states are stepping up to protect the unemployed by enacting laws that prevent employers from using credit as a discriminatory method of job eligibility. Some are limiting the use of credit checks to those individuals who would be responsible for money in some way and thus need to prove financial responsibility. While others are flat out banning it unless specific conditions are met – and only after a job offer has been made.

If your state is not taking steps to protect the unemployed from this “possible” abusive activity, you can just refuse to sign the credit check form. If you feel that you were denied employment because of this refusal, you might consult the National Consumer Law Center for information on what you should do next.

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