Employers Increasingly Using Credit Checks to Screen Applicants
More employers are conducting credit checks on their job applicants, stating that credit checks help them find honest and trustworthy workers.

October 26, 2011 /24-7PressRelease/ -- Employers Increasingly Using Credit Checks to Screen Applicants

For many workers laid off during the recession, financial struggle has become the name of the game. As incomes dwindle, millions of Americans find themselves facing unpaid medical bills, mounting credit card debt, foreclosure or even bankruptcy. What they don't realize is that the financial steps they take to survive unemployment may cost them the ability to get a new job.

Sixty percent of employers nationwide report conducting credit checks on at least some applicants, and 13 percent investigate the credit history of all potential employees. Employers say that credit checks help them find honest and trustworthy workers, and help protect against theft, fraud and other forms of employee misconduct.

Detractors say these credit checks unfairly target victims of the recession, many of whom have encountered financial turmoil through no fault of their own. Although credit checks may make sense for bankers and accountants, many wonder why workers with no financial responsibility are subject to the investigations, especially when studies have found no connection between credit score and job performance.

Washington Law Protects Job Applicants

Thankfully, Washington law protects state residents from unfair credit checks. The state was one of the first in the country to prohibit companies from conducting credit checks on job applicants, unless the credit check is "substantially related" to the job or otherwise required by law. Employers must also inform the applicant of the credit check and receive the applicant's permission before proceeding.

Thanks to the law, Washington residents who have filed or will need to file for bankruptcy because of unemployment don't have to fear it will affect their future employment prospects.

The law is generally viewed as the most stringent in the nation. While this is great for Washingtonians, many Americans are still struggling. Experts and consumer advocates throughout the country are calling on politicians enact reforms that would prohibit companies from denying jobs solely based on credit history.

Credit Reports Aren't Always Accurate

The pattern of dismissing a job applicant based on their credit report is especially troubling considering that the information in the report may not be accurate. The Consumer Data Industry Association -- the trade association for credit reporting agencies -- estimates that over one million credit reports contain incorrect information. The federal government says this number is likely much higher.

This story further illustrates how financial problems can wreak havoc in a person's life. People struggling with financial problems would be wise seek the advice of an experienced bankruptcy attorney who can help them understand their debt relief options.

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