Don’t Let Your Credit Report Cost You a Job

Published

June 6, 2012

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One area of many people’s lives that can be affected by their credit history without their knowing it is their job search, according to a report from CBS News. Some surveys have shown that as many as 60 percent of all employers order copies of job seekers’ credit reports as a means of vetting them when they apply for jobs.

While many consumer advocates say that this practice is unfair and not predictive of a person’s trustworthiness, and a number of states have outlawed the practice, it goes on nonetheless, the report said. Typically, it is used to disqualify some applicants for positions for which they might otherwise have been completely qualified, and employers routinely defend their use of these documents.

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“A person who is living beyond their means, think about FBI agents for example who sold secrets; a person who has financial stress can sometimes be more prone to external risks,” Stuart Pratt, who represents the credit industry, told the news agency. “It’s not the on-off switch as to whether I get the job. Quite often, it’s just an evaluative part of the process.”

But the problems posed by this practice are real for consumers, many of whom are in a vicious cycle of having bad credit because they lost a previous job and had to rely more heavily on credit to make ends meet, but cannot get a new job because they have bad credit, the report said. And this can be exacerbated by inaccurate data on a person’s credit report.

Other studies have shown that about 80 percent of consumers’ credit reports contain at least one error, often as a result of a typographical error on the part of a credit issuer. This can lead to people being faulted for debts and delinquent accounts that aren’t theirs, which can severely affect their credit rating.

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Fortunately for consumers, it’s possible to resolve these issues up by ordering a copy of their credit report and contacting the company that issued the document about the inaccuracy. In many cases, this can clear up the mistake.