How Bad Credit Records Influence Employment

Employers receive a modified version of your credit report.

An employee background check may include access to your credit report. Employers use credit records to determine potential risks and reliability. Employers must have your written consent to access your credit records.

Hiring and Termination

Potential or current employers may use information on your credit report to deny employment or terminate you. If you have been denied employment or terminated due to information on your credit report, the employer must supply you with a notice stating the reason.

Advancement

You may be denied advancement opportunities with your employer if they use your credit history as a means to determine your reliability. As with the hiring process, if you were denied advancement due to your credit report, your employer must provide a disclosure stating credit records influenced the decision.

Considerations

Employers have the right to take adverse action concerning employment due to most information on a credit report. However, federal law prohibits employers from denying a job or terminating someone due to bankruptcy. In addition, some states limit the types of jobs for which a credit report can be used.

Warning

Your employer may recheck your credit records throughout your employment if you signed a separate paper giving consent.

References

• Federal Trade Commission: Using Consumer Reports; What Employers Need to Know
• Privacy Rights Clearinghouse: Employment Background Checks
• Experian: Employment and Credit