Can a Bad Credit Report Stop You From Getting a Job?

Companies check more than your references and job history when you apply to work for them. In addition to the standard criminal background check, many employers now pull a credit report on job applicants. The credit report shows a snapshot of the candidate's level of personal responsibility. This may be a detriment to people with medical bills or the long-term unemployed whose credit has suffered.

Federal Law

The federal law that prohibits discrimination in employment against applicants who have filed bankruptcy does not apply to job seekers with other types of bad credit. Private employers can legally deny jobs to applicants with bad credit, according to the Federal Trade Commission.

Refusal to Hire

When many people apply for the same job, the employer may be very selective during the hiring process. The employer may eliminate candidates with financial blemishes, even if the job is not of a financial nature. An employer who refuses to hire a candidate due to information in the job candidate's credit report must supply a copy of "A Summary of Your Rights Under the Fair Credit Reporting Act" to the job applicant.

Employer Attitude

Some employers believe that job applicants who do not manage their finances properly and pay their bills on time would be bad employees. According to Money Central, employers believe that people with bad credit are irresponsible and more likely to steal. Additionally, some employers believe that a job applicant who does not make good decisions in his personal life would probably not make good decisions at work.

What You Can Do

You should not give up looking for work if you have bad credit. Read the job application to see if it contains a clause giving permission for the company to run a credit report on you. If it does and you receive a tentative job offer, then offer both a verbal and written explanation before they run the credit check. The explanation should include the reason for the delinquency, such as unemployment or lack of health insurance, and that you have arranged with the creditors to repay the debts. If the employer knows in advance that you have control of your financial situation, he may not give much weight to a bad credit report.