Credit Report Errors Can Hurt Your Interview Chances

Posted by in Career Advice •


These days, just getting invited for a job interview can be a big deal. However, many employers are using background checking, including credit checks, on prospective employees before the interview. Depending on the candidate's criminal history, background and credit, the employer may rule them out before they have had the chance to sit down and talk.

 

It's frightening to think that your job chances can hinge on what information an employer receives about you from a background-check company or a credit-reporting agency. What's even more disturbing is that according to a recent report from the Federal Trade Commission, there are widespread errors on consumer credit reports – errors that could prevent good people from getting hired.

 

The report revealed that an alarming 42 million credit reports contain errors that negatively impact consumer credit ratings. This isn't the first time that the credit reporting system has been under scrutiny. In 2004, the National Association of Public Interest Research Groups found that a staggering 79 percent of credit reports contain errors. If that wasn't enough to raise eyebrows, the news program, 60 Minutes aired a scathing report about how common these errors are and how difficult they are to be removed.

 

It's disturbing how many serious errors there are, because for most of us, all we have to recommend ourselves to banks, mortgage lenders, landlords and even employers is our good name. When incorrect information is difficult to find and remove, we may get turned down for a home loan, denied credit, be unable to rent an apartment or find a job.

 

The three major credit reporting agencies, Trans Union, Experian and Equifax, keep credit information on over 200 million Americans. Although there are plenty of websites online that offer free credit reports but charge a monthly fee, you are entitled to one free copy of your credit report from each of these credit reporting agencies every year. If you haven't gotten your free report, you can easily do so at annualcreditreport.com or similar sites. (Just be wary of any sites charging fees or automatic payments. You don't have to pay if you don't want to, or if you decline after any trial period.)

 

To protect yourself and your chances at a great job, take a look at your credit report and make sure that there aren't any errors that could be negatively impacting your overall credit score. If you aren't sure how to go about it, the NCLC offers a great step by step overview that you can view here.

 

If you find that your report contains errors, you can report them here and try to have them corrected. Most people find that once they take the steps to correct the errors that their credit reports and their FICO credit scores improve dramatically.

 

Have you ever had an employer check your credit report? Please share your thoughts in the comments.

 

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  • Melissa Kennedy
    Melissa Kennedy •
    Wow! What a great discussion.@Charlotte S, I'm with you. I would think that someone with bad credit would be willing to work harder. Many employers think that someone with bad credit will try to steal money or merchandise, will make false workers comp claims and so on. The sad fact is that if those people were willing to go to illegal lengths to pay their bills, they'd have great credit! They are poor because they believe that hard work and integrity will pay off.
  • Gregory P
    Gregory P •
    Thank You for the heads up.It appears that employers are not acting in good faith anymore and that there exist serious problems with the employment of our citizens in our America
  • Charlotte S
    Charlotte S •
    If I was doing the hiring, I would want to hire the person who has had credit problems and financial problems, because I know that is the person who would be willing to stay overtime, would stick closely to company policy so as not to lose their job, etc.  It's the person that is in the deepest financial trouble that is the one who is going to take their job seriously.  When my husband and I lost our jobs due to the economic crash, we were both willing to drive long distances, work crazy midnight shifts, and drive to extremely dangerous neighborhoods, all to have a job.  Not to mention we never take sick days or days off, don't come in late and if the boss says "jump", we say "how high".  So these companies who won't hire someone due to bad credit checks, are obviously being run by morons and lunatics.
  • Charlotte B
    Charlotte B •
    In this economy I feel that a credit check is not a good way to judge people for a job. In fact in any economy, unless you are actually handling cash, credit  checks is an invasion on peoples priviacy.If you are looking to fill a position in your company and the person that you feel would best meet your requirements but feel that a credit check is the deciding factor is that really making a good judgement call??  Most people looking for work will most likely find that their credit is not the best. As a perspective employer credit reports should not have any impact in the decision making for the job applied for. I do agree with a criminal background check but also feel that there may be unusall circomstances that need to be addressed by the job applicant. Keep in mind that for the most part people with good work histories most likely a high standard as far as their work ethics and most likely also in their every day life. Judge the person NOT their financial situation.
  • Melissa Kennedy
    Melissa Kennedy •
    Thanks for the comments. @JD, it used to be that the only people who would check credit were banks or other financial institutions. Now, even grocery stores credit check prospective employees, even when they are being hired for a stocking position, because there is a chance that they might be asked to work a register. It's crazy. The company does require any applicant to agree to the background check and credit screening. It's a separate page on the application. Whether they will hire someone with bad credit or not, I don't know. Still, they do the check before making a job offer.
  • Danton R
    Danton R •
    I would say that a lower credit score can sometimes land you the job, I recently read about a study where they correlated certain things to ppls credit scores. They found out that ppl with lower credit scores had lower IQs, were more likely to show up to work late, and also take more sick days than their high credit score counterparts. On the other hand, they where more likely to repeatedly do mundane tasks, they tend not to question authority, and overall are more coercible than ppl with higher credit scores. Ppl with higher credit scores tended to make it to work on time, were more likely to voice their opinions and question authority. With so many ppl unemployed/underemployed in the architectural field I highly doubt that employers are running 40-60 background checks before even doing a single interview, but I do imagine that a number of applicants that make it into the initial rounds of hiring maybe screened via a background check/ credit check. All in all, it depends on what the employer is looking for. Are they just looking for a CAD monkey to repeatedly do mundane tasks, and sit there and shut up, or are they looking for a project manager, someone that is a go getter, and can think outside the box. Alot of the times employers are looking for the person that wont question authority, and although they might be 5-10mins late on a daily basis, they can be cohered into believing that if they move to salary, and work an extra 5-10 hours a week, they will rocket to the top of the company. I would say that ppl with very high credit scores may have just as hard a time finding a decent position as someone with a very low credit score.
  • Donna J
    Donna J •
    I was amazed at the number, "79% of credit reports contain errors!" It has been frustrating that Creditors rely on this bad info, and the reporting agencies seem to have no incentive to correctly report!
  • Michael M
    Michael M •
    Darrell,  Your comments describe my situation precisely.  Their remedy is to pour more fuel to the fire !!
  • Debra L
    Debra L •
    It should be illegal to check credit for a job.  Most places do a criminal background check that should be enough.  I had good credit until I had no income.  Now it is terrible.  You can't pay bills because you don't have a job and you can't get a job because you can't pay your bills.  What an impossible vicious cycle.  It's an intrusion of privacy, an excuse for discrimination.  What is this country coming to when people who are unemployed feel like there life is over with no hope for a future
  • Maxine W
    Maxine W •
    I agree with what this article is saying. Checking credit reports has nothing to do with a person performance on the job, I agree with all commits this is an form of discrimation and should not be allowed, the system needs to go back to the old way of interviewing people, calling them into the office then, based on the person, interview, and how they felt that person will fit in with that company. Thanks to some people comments for well needed information that was given.
  • JD
    JD •
    Typically, any credit checks that are performed for a position is usually a bank, credit, insurance or financial institution. Before companies can perform a background or credit check they require your written authorization. However, how will these companies preceive you if you refuse? Will they think or assume that you have something to hide? I think if you feel strongly against this process then you should clearly explain to the potential employer that you feel that it is an invasion of your privacy and that you don't condone such practice. You can go on to tell them that running the credit report should not be the basis or merit in performing the job to the best of your ability based on your experience and skills. Perhaps by being honest and speaking up the potential employer may respect you even more. You may not get the job especially if they stress that it is company policy but at least you were upfront and  gave it your all.
  • Alberto M. D
    Alberto M. D •
    Isn't there a shred of a law in that country protecting citizens from this kind of privacy invasion? In the EU you just cannot do that. Getting a credit report without getting permission from the person? You've got to be kidding me. That would get you, the employer, into big (criminal) trouble. In Europe, that is...
  • Darrell G. W
    Darrell G. W •
    To down someone for employment for bad credit without knowing the circumstances is just pompus hypocrisy!Many of the employers who do so are the same ones who wrecked the economy, filed Chapter 11's, and took various bailouts.I was forced into a Chapter 7 after the hospitals I was paying stellarly decided to sell their debts to outside companies who then tripled the interest and payment making things unaffordable. Then my job went out on me shortly after.Several of my interviews went great and hiring was contingent on a background check.My only negative per the small print on the back of the aps is my credit.Im now scum because of what I couldnt control out of these hospitals. It doesnt matter that I've not missed a lick on anyother bill Ive had.
  • Christine H
    Christine H •
    I think this is an evasion of privacy !!!!!
  • Wendy H
    Wendy H •
    I agree with the following comments, checking someone credit who is not looking for a loan is the highest form of discrimination.I have been denied many jobs that I qualified for because of my credit, I recently finished graduate school therefore, I had to cut back on my hours at work sometimes.  Nevertheless, I could not pay a couple of bills on time or sent to collections for medical payments. OMG! Consequently, the people who have good credit are the ones who were caught stealing company funds and displayed low morals. (i.e. Enron, Health South CEO). Those of us with bad credits are good people with no criminal history.  This must stop now!.  It is hurting the economy as well.
  • Paul W
    Paul W •
    The FCRA does provide protections to individuals in the form of adverse action letters based on credit reports.  http://business.ftc.gov/documents/bus08-using-consumer-reports-what-employers-need-know .   But some recruiters and HR people use the cheapest source of information available which may well be full of errors.  Most legitimate licensed private investigators and HR departments know the rules.   If there is an attorney familiar with FCRA enforcement, please post a follow-up.  
  • Sharleen S
    Sharleen S •
    When hiring someone for a jobthe employer should look athow much experience andskills they have not look at thecredit reports.  I helped mybrother pay his bills cause hebecame a caregiver for mymother and later found outwhen they passed away Idid not have to help him.That is why I filed for bankruptcy and now I amhaving a hard time getting ajob.
  • Tom M
    Tom M •
    If you are unable to get deletion of inaccurate or unverifiable accounts, or dont have time to be persistent in disputing your negative items correctly, Friendly Fico can help. They are a credit repair service that knows the federal laws the credit bureaus must abide by if requested correctly, they can assist you in legally removing the negative items on your report and raising your credit rating. Its a 6 month max program, usually you'll see your credit score jump after the first month. The website is www.FriendlyFico.com
  • Maneewan T
    Maneewan T •
    How can they be sure that people with fine credit would do a better job?
  • Steve S
    Steve S •
    Forbes reported there are over 60 million people who need not apply. Not to mention most sourcing firms forward the information offshore - caching information for the global community - you approve - it's via email off shore through email gateways across the globe whether or not your background is perfect, or ugly - "send me a word document". How would you like somebody sending a report through multiple email gateways, across the globe, including SSN numbers, all your credit info, criminal good or bad- because you approved providing the information for a 3rd party sourcing screen? No liability here - what about data loss protection and compliance of privacy information?
  • Kristina D
    Kristina D •
    It is a form of discrimination. Employers should not be able to have access to credit reports. That let's them automatically label someone as bad based off credit. I think it lets them label  people with bad credit a thief because those with bad credit will want to steal from the company which is not the case. Government needs to stop businesses from being able to do this those of us with bad credit are not bad people and we suffer by not being able to find jobs so we can provide for our families so we have to resort to being on welfare just so we can survive.
  • Marc R
    Marc R •
    For over 35 years we have not missed or even been late on one payment on several loans mortgages and credit cards lose your job and cant make your payments for 3 now and credit is now horrible. Not much you can do about it. Its crazy that could stop me from getting a job in offer to het our bills caught back up that's just crazy and something needs to be changed about this .
  • Keno G
    Keno G •
    Could not agree more with Freddy N and Deborah K below. I have been out of work over 2 years, and am 6 months behind in my credit card payments (payment history was fine until  I ran out of money). Where do employers get off checking the credit of people who are out of work and would be extremely motivated to do a good job if only they could get one? I agree that there should be Federal legislation prohibiting employers from credit checks. Criminal record OK, credit - no way. It means that once you lose your job and can't make payments, you are discriminated against ever working again. This is almost as stupid as the old debtors prison laws, where a debtor was imprisoned until he could pay back the debt, which of course, he had no way of doing. It is the same kind of backward, barbaric logic. WRITE YOUR CONGRESSMAN!  MAKE THE FOLLOWING PART OF A NEW CREDIT REPORTING ACT:  1) Credit bureaus may not release credit information without specific authorization of the debtor.  (Lenders can simply choose not to lend without it.)  2) IT SHALL BE ILLEGAL FOR EMPLOYERS TO REQUEST CREDIT REPORTS – just as they are now not allowed to ask an applicant’s age or marital status.
  • Anita T
    Anita T •
    I too find this to be discrimination!!  It should be against the law because the way the economy is, and the high cost of living sometimes someone has to decide on whether to pay a bill or buy groceries for their family!!  Personally, I would buy the groceries.  I see no reason an employer should need to know this information.  A criminal background check or drug testing yes, but credit?  That does not necessarily make a person "less fit" to perform at a job, there is a long list of reasons that could cause bad credit, the government is #1 in my book.  I think we all should write to our President, our Congressmen, etc. and tell them to amend or totally do away with this discriminatory law for good!!!
  • Mary V. S
    Mary V. S •
    If this is known, then why would employers reject someone for a problem in their credit? Moreover, sometimes bad.credit is just an unfortunate circumstance.that happens. A person needs a job and an income to improve their credit rating as well, or the problem will not get better.

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