A Bad Credit Score Could Cost You Your Job
Your credit score says a lot about you: how responsible you are, how fiscally fit you are, and how intelligent you are as a human being. OK maybe that last one is a stretch, but I might be right—I do have a very high credit score.
If you thought a bad credit score could “only” affect the interest rate you get on a loan, you’re wrong. Here’s the write up from Liz Pulliam Weston on a study about how employers are using credit scores to fire people. The craziest part about it is that it’s illegal and some employers don’t seem to realize it:
Twenty-five percent acknowledged that a bankruptcy on an applicant’s credit report would most likely result in a decision not to make a job offer. Here’s the problem: Using a bankruptcy as a decision not to hire (or to fire or to refuse a promotion) is illegal under federal law.
I would love to have seen the HR manager’s face when confronted with that nugget of information, “Oh….ummm, that’s not good.”
I don’t really care one way or the other if an employer is using a credit score to make a decision about me (it can only help someone like me). Of course, if it’s illegal they shouldn’t do it. But for everyone else out there with a mediocre or bad credit number—this should make you really paranoid.
In a good way.
You should use this as motivation to clean up your score. To pay your bills on time. To stop carrying a balance on your credit card. To start taking control of your finances. If higher interest rates and higher fees don’t motivate you enough, think of your dream job being handed to you and then being taken away because you really wanted that Playstation 3 you couldn’t afford.
Is it really worth it?
I’m curious to hear if people think this is unethical or not. Aren’t employers simply covering themselves and trying to gather as much information on a hire before committing to them? Share your thoughts in the comments!
This post was included in the Carnival of Financial Planning over at CashMoneyLife.
