Jobless can get your poor credit scores even worse

Being unemployed for several months can destroy your credit score. Even if you manage to juggle accounts and keep paying the bills on time, using credit cards to make up the shortfall between unemployment benefits and monthly expenses is damaging.

Worse, too many consumers have learned, when you start using your credit cards, card issuers are beginning to lower credit lines and raising interest rates. This is a practice that has caused many unemployed simply stop paying credit card bills. Thus, their credit scores fell in the basement.

Most are eager to find a job and get back on track with paying bills, but it fell credit score gets in the way.

From a 2004 survey by the Society for Human Resource Management, 40% of employers are checking credit before hiring. Now, with the candidates that are flooding the job market, the number is probably higher. Many review the credit history before a first interview with a job candidate. Others are checking after hiring and terminating employees based on their credit ratings.

Employers cite as a good business practice – which will prevent them from hiring people who are irresponsible or that make bad decisions. Some also claim that the practice could reduce employee theft. And of course, with so many candidates to choose, using credit scores is an easy way to dilute the numbers.

Defenders argue that jobless checking credit scores is a form of discrimination “safe” – and a good credit score is often completely out of place. missed payments or medical debt have no impact on the skills and abilities of a person, such as a plumber or an auto mechanic.

United slowly recognize the problem and take some steps to prevent this practice. In Washington, for example, the credit history of a job applicant should be relevant to the job he or she is seeking. Lawmakers in Hawaii have approved a similar measure, but take a step further by allowing employers to examine the credit history only after making a job offer.

Lawmakers in Ohio and Michigan are considering measures that would prohibit employers from using credit histories in hiring decisions.

Federal law requires employers to obtain permission potential employees before running a credit check. In addition, if they decide to deny employment based on the credit report, they are required to notify the applicant. This rule is intended to give the potential employee the opportunity to explain the reason or spot errors on the report.

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