There are some interesting stories creeping up online about job applicants being turned down because of their credit histories, and even one recent article about people losing jobs they already have.
According to an article on Cleveland.com, 67 people have been suspended, fired or will be fired from their jobs at the United States federal government's Defense Finance and Accouting Service because of their poor credit reports.
The U.S. Government, trillions and trillions of dollars in debt itself, apparently has rules about its employees having shaky credit. If you're having financial difficulties, you're not apparently no allowed to have a job that has access to financial information. A couple of Ohio lawmakers are going to battle for the 67 affected workers at the Cleveland DFAS, but it might take a rule change to get those jobs back.
As you can probably imagine, in the current financial climate we live in, a rule like this is probably going to affect more people than it has in the past. And it's not just federal employees who have to worry about it.
A recent article in the Baltimore Sun reported that, according to the Society of Human Resource Management, 60 percent of employers used credit reports to help screen job applicants. In the article, one man says he has been turned down for eight jobs at companies that pulled his credit report.
It appears to be a vicious cycle -- lose one job because of the economy, fall behind on your bills, then struggle finding a new job BECAUSE you fell behind on your bills. Fair or not, that appears to be the reality of the situation right now, which should tell you how important it is to keep your credit score up.
Employers argue that the practice of checking job applicants' credit gives them a screening tool that shows them how responsible a person is with finances. There is also some belief that those with poor credit are more likely to commit fraud or theft at a company at which they hold a position that entails the handling of money. According to the Sun article, that might not just mean paychecks for the U.S. Defense Department -- it may include waiting tables at a restaurant.
Using a credit report to say one person is likely to be more dishonest than the next hardly seems scientific -- and hardly seems legal -- and, as the Sun article points out, one's credit card payment history probably doesn't say much about his or her ability to perform the job. In fact, there are efforts in a good number of states to outlaw the practice of companies using credit reports to deny applicants.
Whether or not it's a fair practice, and whether lawmakers' efforts to change things is effective, it is important to realize how impactful your credit score is now a days. It influences the interest rates you pay on loans, influences the rates of insurance you pay -- and now can impact your income as it relates to your job.
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