Why a Credit Score Is Required For Some Jobs

Posted by | October 8, 2010 | Blog, Question and Answers. Ask A Question Here

QUESTION
Why do some jobs require a credit report or a minimum score? Is this legal?
~Debra Vang, Murfreesboro TN

ANSWER

Not only do applicants need a flawless resume and stellar interviewing skills but many now need a great credit score.

If you’ve applied to a job recently then you’ve probably noticed the increasing use of credit checks by employers. In fact, the use of credit reports by hiring managers is widespread and becoming more so. A recent survey by the Society of Human Resources Management found that 60% of employers conduct credit background checks for some or all job candidates.

Your credit score is defined as ”a number, roughly between 300 and 800, that measures an individual’s credit worthiness. The most well-known type of credit score is the FICO® score. This score represents the answer from a mathematical formula that assigns numerical values to various pieces of information in your credit report.” Some employers will consider applicants with credit scores as low as 450 while others are only looking for applicants with “near perfect” scores of 650 or above. (This is especially true of work at home jobs in the financial industry).

Problems with your credit report can cost you the job. This is especially true for work at home job seekers who will be required to maintain not only a home phone line and electricity but the home itself in order to perform work. Employers have been burned by job seekers who are hired to do a job but then cannot perform because they do not pay their telephone bill or Internet access.

Free Credit Consultation – Includes Credit Report Summary & Score

Companies typically look back over a period of years for patterns in applicants’ behavior. It’s a longer-term snapshot to see if that’s indicative of fiscal responsibility. This combined with your skills, education, home office tools and references are all used to determine your worthiness to work from home. Whether you agree with this technique or not, it is all the more reason to keep a close eye on your credit.

There are hundreds of work at home employers who now require a credit check. VIPdesk, for instance, requires a minimum FICO score of 500 before you can be considered. According to VIPdesk, this is in full compliance with the Fair Credit Reporting Act and current labor laws. Employer credit checks are only considered to be discriminatory if they disproportionately exclude minorities, women or people over 40 and are not essential to a hiring decision. VIPdesk is far from the only company that requires a credit check – many County and State government, city jobs, federal jobs and opportunities with top Fortune 500’s now require an acceptable credit score.

Last year as many as five states in the U.S. attempted to challenge employer credit checks but most failed to move forward. While some are still pending, the majority were dropped because employers were able to easily prove that credit checks were useful and necessary to the hiring process especially as they relate to hiring home based staff. Simply put: a company must have some assurance that the home based employee that they hire is going to maintain the tools necessary to work from home. The best way to prove this is by hiring someone who has not made late payments on their phone bill, Internet fees, rent or mortgage and other related services.

It has been well documented by reputable news sources: employers want job candidates with good credit, so be sure that yours is free of errors.

For further reading we suggest:
How Bad Credit Can Cost You A Job
BestCredit: How to Win the Credit Game
Credit Repair Kit

Denied credit? Legally repair your credit report.

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