Double whammy for unemployed

4:52 PM, Mar 17, 2010   |    comments
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More companies are running credit checks on potential employees, and those with poor credit scores are often getting passed up.

Kate Holland is a credit counselor with Money Management International. She says many of her unemployed clients are racking up credit card debt.

"They're totally stressed out. Everyone who comes in to me has a credit problem. They don't have enough to pay their creditors," Holland said.

Kim McGrigg, Money Management International spokesperson, says about 50 percent of employers run credit checks.

"Oftentimes a result of a terrible economic time is we end up with terrible credit. One preemptive thing a candidate can do is to get a copy of their credit report before their employer gets it so they know exactly what that employer will see," McGrigg said.

If you are worried about the results, McGrigg says it is best to be honest.

"That's the time to be open with your communication with that employer, to tell them what they can expect to see, why they can expect to see it, and how the problem has been resolved," McGrigg said.

As for employers, there are some rules about credit checks they have to follow.

"There has to be a job-related reason," Lorrie Ray, a human resources lawyer with Mountain States Employers Council, said.

Ray says in order for companies to run a credit check, the applicant's position has to involve financial responsibility. She says not all employers are following the rules laid out in the Fair Credit Reporting Act.

"If they're not going to hire the employee because of bad credit, they need to let that employee know in a pre-adverse action letter if they used that third party to run the credit check," Ray said.

Ray says more companies are running credit checks right now because there are so many applicants for each job. Ray says some companies are using credit checks as a screening method.

Credit counselors suggest you get a free credit report before applying to jobs that might check your credit, so you know where you stand.

You can get a free credit report each year by logging on to: www.annualcreditreport.com.

You can learn more about Money Management International from their Web site: www.moneymanagement.org.

(KUSA-TV © 2010 Multimedia Holdings Corporation)

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