Recently, many companies are starting to check up more on the credit reports of job applicants before they hire them. And these companies who perform these credit checks also point out some of the many credit report blunders they find that dissuade them from hiring applicants.
Employers, both from the government and private sectors, have started to use applicants’ credit reports as a basis for hiring in which they could also see how financially responsible an applicant before allowing them to get a position in their company. According to statistics from the Society for Human Resource Management, over 60% of employers use credit checks to screen their applicants which are a big change as compared to the 35% of them using the same method back in 2003. And these companies have also listed some of the top red flags that they find in credit report that might cost applicants a job if found:
- Court judgements on file, over 64% of employers would not hire applicants with these on their records
- Accounts in collection, 49% of employers would exclude applicants with this on record
- Bankruptcy, 18% of employers would not hire with this red flag on record
- High debt, one-quarter of employers would reject applicants with this
- Foreclosure of homes, 11% would exclude applicants with this
These figures show just how important it is for consumers to build their credit scores to get a higher chance of getting a job. Unfortunately, these developments in hiring and screening applicants came at a bad time when around 9.5% of the American population are currently unemployed with millions of them having low credit scores and their credit reports showing lists of missed payments. And these unfortunate unemployed have also been forced to rely on borrowing money and credit to get by, which would hardly improve their scores and financial situation.
According to Nat Lippert, a research analyst of Unite Here, that this situation where the credits of many American consumers are going lower and lower while employers are screening applicant using their credit reports have become a Catch-22 situation. Lippert shows this by pointing out that because consumers are unable to pay their bills because they do not have a job to get money, and at the same time the same kind of consumers looking for a job could not do so because they are unable to pay their bills.
Consumers and job applicants alike are advised to steadily build up their credits and maintain having a good credit report to have better opportunities at work. They should pay their bills on time, consult with a consumer credit agency for help if they have difficult in paying on time, and avoid any kind of irresponsible consumer behaviour that would do more harm to their scores.
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