Credit checking has almost become one of the normal procedures that job applicants have to go through in order to get past the first stage of the employment screening process. Is the procedure even legal? Are there laws to protect you from having your credit checked as a condition of applying for a job? Each state has their own set of laws regarding this issue. How do you find out what your rights are regarding pre-employment credit checking?
Since there have been a large percentage of home foreclosures in the last few years, it would make sense that those people who lost their homes would now have a ruined credit rating. A poor credit rating use to mean not qualifying for loans or credit cards. Now it becomes an issue of not getting a job. A vicious cycle of not being employed, can’t pay bills, black mark on credit from not having a job leading to not being able to get a job because of the black mark on the credit from not having a job. Some states allow that practice to continue but a growing number of states do not allow it and in Oregon, the practice is illegal.
Oregon does not allow the practice of using a credit check on prospective employees as a method of screening. The only exception is for bank and loan company applicants. Unfortunately it does not stop many companies from asking people to volunteer to a credit check. Most applicants in Oregon do not realize that the practice is illegal and enter their social security number and sign the release form. This law was signed in February 2010 and went into effect on July 1, 2010, you can read it here. As more Oregon residents become aware of this new law and the fact they can sue those companies asking for permission for a credit check the practice will soon disappear.
So far only 2 other states have similar laws regarding employment credit checks and they are Hawaii and Washington state. The state of Illinois just passed their version of the credit check ban and that law takes effect in January 2011.
To find out if your state is planning a credit check law, just type in the phrase “employment credit check law” and include the name of your state, into Google search. You will probably find out if there is legislation moving through your local state’s government and how it is doing. Some of the larger credit checking companies have been fighting the bills, since it means lost revenue for them and they have been able to block legislation in some states.
To protect yourself, know what a company can legally ask for at the job application stage in your state. I make it a practice of never entering my social security number on any application or resume’. They can only get that information once I have been offered the job.