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How Do Credit Histories Affect Employment?
On September 13, 2007, VISA USA released a statement claiming that "a bad credit score is more than just a barrier to getting a loan - it may also keep you from getting the job you want." The press release went on to publish internal survey results stating that only 20 percent of Americans "know that it is legal for employers to refuse to hire job applicants with low credit scores." While credit histories may be utilized in making a hiring decision, the idea that a consumer's credit score impacts his/her hiring eligibility is not just misleading, but categorically false.
The requesting and reporting of credit history information is regulated by the Fair Credit Reporting Act (FCRA), which requires that employers and consumer reporting agencies maintain a "permissible purpose" for requesting consumer information from any credit bureau.
To protect consumer privacy and prevent a consumer's score from impacting his/her eligibility for employment, credit bureaus "scrub" their reports based on the requestor's permissible purpose. Lending institutions and other credit grantors have access to view most account information as well as a consumer's credit score. Reports generated for employment purposes do not contain score information and are masked to protect the privacy involved with medical collection records, or other records that could prompt a hiring decision inconsistent with federal law.
The credit score myth is not the only misnomer about credit reports requested for employment purposes. Many consumers and employers alike are concerned that just pulling a credit history will impact a consumer's credit worthiness, as a request for a credit report will place an inquiry entry on that consumer's report (excessive inquiries can prompt a lender to view a consumer as a credit risk). However, reports pulled for employment purposes place what is referred to as a "soft inquiry" or "soft hit" on a consumer's report. This different type of inquiry lets a lender know that that the request was not made in connection with a credit transaction, and therefore mitigates the credit risk.
Protection of consumer data is of the utmost importance to InfoMart. To this end, our Compliance department works closely with our customers and the credit bureaus to ensure full compliance with the FCRA.
For more information about InfoMart's Credit History Checks, please contact 770-984-2727 option 4 or sales@infomart-usa.com.
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