Let’s face it, having bad credit can cause us a lot of grief and in various ways as well. One common problem bad credit can create is trouble of course obtaining future loans and ultimately not being able to meet those financial milestones you have been striving for.
Another credit concern that many individuals may be less aware of when it comes to our finances, is the realization that having bad credit can negatively impact our ability to secure employment.
While it may seem like these two things should not go together whatsoever, the reality is that some employers do require that prospective employees undergo a credit check prior to officially being hired.
One such area of employment that seems to factor credit checks into their hiring process is the financial industry. However, it doesn’t appear to stop there. Credit checks are also commonly taken into account across a variety of professional and places of employment.
As it would seem employment in areas such as retail and other jobs where there are apparently higher ‘opportunities’ for employee theft and fraud, as those where credit checks are being performed more regularly. All in all, the areas of employment that are more likely to include these hiring practices is anywhere an employer may believe that their employees will be more at risk for taking part in ‘on-the-job’ criminal activities/
While there has apparently been studies that classify employees with bad credit and a high level of debt as more likely to be prone to acts of stealing and fraud in the workplace – this of course has angered and offended a lot of individuals who feel it is a case of discrimination.
With that being said, these credit checks are still being performed in various places of employment, as well as across certain Canadian provinces as well as in the United States. With all of this controversy surrounding this issue, there are many American states and Canadian provinces that are reportedly looking to end these hiring practices and some regions have already taken this action.
Instead, there is a strong consensus that credit checks should only be limited to those times when borrowers are in fact applying for mortgages and other types of loans. Furthermore, employees who have met the job criteria and are deemed a skilled candidate for that position and therefore an employer feels they want to move forward and hire them job, then a credit check should not be the sole reason that the employee cannot secure employment.
Well, the unfortunate truth is that this has been occurring for various individuals seeking employment and that the number of job seekers this affects may even be higher than what has been documented. In fact, many qualified employees who have perhaps fallen on tough financial times, yet are capable of fulfilling the job requirements with a high level of reliability and success are instead being turned down for this employment.
Since a credit score can be low for a variety of reasons, and not necessarily an indication that the borrower is in fact irresponsible – this could certainly be seen as an unfair course of action. The reality is that securing employment is a challenging process for a variety of economic reasons in many regions around the globe. Therefore, if individuals are seeking employment then it is more likely a case that they are trying to turn their finances around for the better – and losing out on a job because of poor credit most certainly will hinder their ability to do so.
Perhaps your best course of defence can be to monitor your credit report as closely and as regular as possible. Since data is collected by the two Canadian Credit Bureaus, checking in with these agencies and making sure there are no errors on your credit report is a good method of making sure your credit score is accurate. In the end, you definitely don’t want to let this type of credit situation negatively impact your ability to gain employment, especially if there is something you can do to prevent it.
While this scenario may not affect everyone, it is a financial concern that is gaining more attention as of late. It is definitely something to be aware of if you are in the position of seeking job employment and also have a credit score that might not be considered a good one.
Where do you stand in this debate – should credit checks be a valued method of ultimately determining an individual’s level of employability?