Just when you thought things couldn’t get worse (record law school debt, job deferrals, law firm layoffs) the Wall Street Journal reports today that bad credit could sabotage your chances of finding work. According to the WSJ, a growing number of job hunters are discovering that their financial past – the sort of information that appears on a credit report – is interfering with their professional future. Journal reporter Kristen McNamara writes that more and more employers are conducting credit background checks, typically going back several years in search of patterns of behavior (i.e., a history of unpaid bills, bounced checks). Most of the employers conducting background checks do so for jobs with fiduciary or financial responsibility.
According to the WSJ, the federal Fair Credit Reporting Act gives employers the right to conduct credit histories on current and potential employees … but only with an individual’s authorization. And while a job-seeker might be tempted to NOT sign a waiver, that alone could be a deal-breaker if a job offer was on the table. Employers might assume the job-seeker was hiding a serious problem and, in this market, have no trouble finding someone else to fill the job.
The founder of an executive search firm quoted in the article said that knowing what’s on your credit report – and, if necessary, offering an explanation for debt caused by a specific event – could keep negative information from derailing your employment chances.