There is plenty of content online that aims to convince you that the way out of your financial problems is to be charismatic enough to persuade people to give you startup capital for a business. Others will tell you that the secret to getting rich is an attitude adjustment. Unsurprisingly, many of these people are willing to sell you entrepreneurial charisma or the missing attitude adjustment, usually for a steep price and often on a multilevel marketing business model. You will also find people who will tell you that you are only as broke or as prosperous as you feel, but many of them come from the generation where jobs with 401(k) accounts were a dime a dozen. They bought their houses at prices that would not buy you two cars today, and they do not have to pay all the bills you have to pay on the income that you earn.
Economists will point to society-wide trends that affect wages, prices, and consumer behaviors, but this does not change the fact that you face a mountain of bills every month, and you have limited funds with which to pay them. For you, the way out of your straitened financial circumstances is to get a job, get an additional job, or move from your current job to one that pays better. Policies that ensure that everyone gets a job are never sustainable in the long term, but federal and state employment laws require employers to be fair when selecting job applicants, even when there are many more applicants than there are available positions. This means that some reasons for refusing to hire a job applicant are illegal.
Unfortunately, there is no blanket prohibition on refusing to hire a job applicant because of a low credit score or negative marks on his or her credit report, but the law protects you from employers unfairly using your troubled financial history against you. The Boulder Fair Credit Reporting Act lawyers at HKM Employment Attorneys LLP can help you exercise your rights as a worker or job seeker under the Fair Credit Reporting Act.
It is Expensive to Be Poor, but Can Being Poor Cost You a Job?
If someone looks surprised when you complain that it is expensive to be poor, that person has never known financial hardship. The working poor get their wages deposited onto debit cards that charge exorbitant surcharges, and when they try to open a bank account so that it will cost them less to access their wages, the bank asks them to submit mountains of paperwork, and even that is sometimes not enough to get the application for a bank account approved. The lower your income, the lower your credit score, even if you pay all your bills on time, because bougie people with mortgages get a boost to their credit score every time they make their monthly housing payment, but renters do not.
In a perfect world, poverty would be a protected characteristic, just like race, national origin, sex, age, religion, disability, and so many other protected characteristics. It would not be legal for employers to discriminate against applicants because of their low credit scores or history of financial distress. The bad news is that employers can consider the information revealed on your credit report as a factor in their hiring decisions, but the good news is that they must be transparent about it.
Credit Checks as Part of the Employment Screening Process
Background checks are a routine part of the selection process when employers decide which job candidates to hire. In addition to checking police records to see if the applicant has a history of arrests or criminal convictions, employers can also contact the credit reporting bureaus to get a copy of the applicant’s credit report.
The credit report summarizes a consumer’s history of payments and borrowing as a numerical credit score, with the highest scores indicating that it is least risky for lenders to lend to the consumer. The report also shows the consumer’s history of making certain payments and of borrowing money and repaying it. Missing payments on debt repayment and other bills counts against you, as does making installment payments late. Defaulting on a loan or discharging your debts in bankruptcy court is even worse. The good news is that no negative mark stays on your credit report permanently, and the good and bad on your credit report can balance each other out.
What to Do if an Employer Treats You Unfairly Because of Your Troubled Financial History
Employers are not lenders. When they issue your paycheck, they are not expecting you to repay it in installments. Therefore, the role of your credit history in hiring decisions should be limited. The Fair Credit Reporting Act guarantees consumers several rights regarding credit checks as part of the job screening process. Since requests for your credit report, known as hard pulls, can have a slightly negative effect on your credit score, employers must notify you in writing that they plan to request your credit report from the credit reporting bureaus, and you must give written consent before they can do it.
Likewise, you have the right to see the credit report that the employer received. If it contains incorrect or outdated information, you have the right to notify the credit reporting bureaus of this, and the credit reporting bureaus must correct it. Likewise, the employer must notify you if your credit report played a role in its decision not to hire you or its decision to take another adverse action against you. An employment lawyer can represent you in disputes with your employer arising from adverse actions related to your credit history.
Contact HKM Employment Attorneys, LLP, About the Fair Credit Reporting Act
The Boulder employment lawyers at HKM Employment Attorneys, LLP, can counsel you about employment disputes related to your credit history or your credit score. Contact the employment lawyers at HKM Employment Attorneys LLP in Boulder, Colorado, to set up a consultation.
