More Employers Using Credit Checks On Job Applicants

Written By Jodi Brooks

DENVER (CBS4) – It’s a recession side effect. People can’t pay their bills because they don’t have a job. And now they can’t get a job because they can’t pay their bills.

An increasing number of employers are using credit checks to screen potential job applicants. It’s totally legal, and bad credit is not illegal, but employers say the information is helpful in the hiring process.

Timing couldn’t be worse. It’s hard enough to find a job in this economy, and now this extra hurdle makes it that more difficult for job seekers.

“I’m actually pretty against it,” said job seeker Rick Fernandez.

“I would rather they judge me on how well I can do the job, ” said Tom Herrmann, also a job seeker.

One woman was so afraid to share her name with CBS4 because she’s afraid her bad credit history will hurt her chances of getting a job she desperately needs.

“Background check, I have no problem with. Drug test, I have no problem with, but when it comes to the credit, that’s somebody’s personal business,” she said.

The woman was laid off a year ago. She asked, “What bearing does (my credit) have on me doing the job?”

Often employers use credit history to gauge a level of responsibility. Whether it’s a valid assumption or not, some employers believe if people are not reliable in paying bills, then they will not be a reliable employee.

“It’s really unfair,” said Andrew Hudson of Andrew Hudson’s Jobs List, Inc.

Hudson helps people find jobs through his jobs list website.

“Make sure that your relevant skills, your talent, your background, your experiences, your accomplishments, all of those things are spelled out very clearly to show that your credit score might not have any relevance whatsoever to the job,” he said.

Hudson admits credit checks are relevant for some jobs. The woman who didn’t share her name wants an accounts payable job. She has 30 years of experience.

“I’m not handling money, I’m not handling any of the finances, any cash per se,” she said.

There is pending legislation at the state Capitol that greatly limits employer’s use of consumer credit information. But for now the bottom line — those who end up getting an interview should fess up.

“You have to be upfront and let folks know what occurred,” Hudson said.

It’s not easy when a credit check stands in the way of the next paycheck.

There are three major credit reporting agencies, Experian (, TransUnion ( and Equifax ( They all provide modified versions of credit reports in what’s known as an “employment report.”

An “employment report” has information about credit-payment history and other credit habits. It does not include a credit score or date of birth. It also does not place an “inquiry” on a credit file. Too many “inquiries” tends to lower a credit score.

Also know one’s rights. An employee needs permission to run a credit check, and an employer is supposed say if credit information is used against a potential employee. Also, under federal law a bankruptcy cannot be used against a person.

– Written by Jodi Brooks


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