Should Your Credit Report History Cost You Your Job?


The Northwest Report
February 24, 2011

You’re the perfect person for that dream job.

You have several years of related experience and you have the education, but you’re in debt up-to your eyeballs.  Moreover, you need this job to get out of debt in order to improve your credit score because employers use credit reports to judge you.  You’re in a catch-22.

Put yourself in the shoes of many Americans:

  • You needed a car loan upon graduating high school because you needed transportation for your first job.
  • Money was needed for college, so you took out a school loan from the Department of Education.
  • Sadly, you had an accident that required medical care.  It put you further into debt because you didn’t have health insurance.
  • The only way to survive with your car payment, medical bills, and living expenses was to charge them to your increasing credit card debt.

Five Years Later:

Fresh out of college, you’re one of the lucky few who received a call from the best and largest employers in your state for an interview.  You practiced so much for this opportunity that your college career center memorized your full name.  Long story short, you predictably aced the job interview and they loved you.  The following week came and went with no congratulatory call. It became apparent that you didn’t land the job because another candidate had a better credit history.

Should Your Free Credit Report History Prevent You From Getting a Job?

Many people do not like related scenarios including those who represent us at our state capitals.  It is estimated that between 40 to 50 percent of employers run credit checks on potential employees.  Oregon is among other states such as Washington and Hawaii that passed bills which limit employers from using credit history for employment purposes.  Former Oregon Governor Ted Kulongoski signed Senate Bill 1045 into law on March, 29 2010.  The bill limits certain employers from using credit reports as a judgment tool for hiring, firing, promotions, and compensations.

Oregon’s SB 1045 has several exemptions:

  1. Employers that are federally insured banks or credit unions;
  2. Employers that are required by state or federal law to use individual credit history for employment purposes;
  3. The employment of a public safety officer; or
  4. Employers that can demonstrate that the information in the credit report substantially job-related and the employer’s reasons for the use of such information are disclosed to the employee or prospective employee in writing.

The Other Side:

Some within the business community believes that related bills ignore essential financial duties that are performed by employees who are not employed by financial institutions (the manager of a retail store or anyone who handles credit cards). Additionally, certain businesses are more inclined than others to be the victims of employee theft.

Businesses are worried about potential employee thefts/fraud by people who are deeply in debt: “If you can’t handle your own finances, how can you handle ours?” One U.S. Chamber of Commerce study concluded that nearly one-third of all bankruptcies was due to employee theft.

Copyright 2011 – The Northwest Report. Permission to reprint in whole or in part is gladly granted, provided full credit is given.

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