Poor credit can be a determining factor for many things from housing to loans. However, can it impact employment? Keep reading to learn more.
What Is Credit?
Credit is a system and a measure of creditworthiness for lenders. As consumers build credit either by renting an apartment or a credit card, they also build a credit score. Credit scores typically range between 300-850 with scores above 700 considered excellent and anything under 600 considered poor.
A number of factors influence credit scores including:
- The age of each line of credit
- The amount of credit usage
- Payment history
- Types of credit
- New or recent credit
If a borrower uses too much of their existing credit or is late on payments, they could have a lower score and may not be considered creditworthy. When lenders have reason to believe that a borrower may be a risky investment, they will not provide new credit, or they may choose to offer credit at a high interest rate.
When an interested party runs a credit check, they consult credit bureaus to determine an individual’s credit history. A credit check may be used by landlords, lenders, or employers in some cases. An employer may check credit reports to assess a candidate’s history with money particularly I they are applying for a position in the financial sector.
If a candidate does not have a positive history with money, an employer may decide to not hire them. However, an employer cannot discriminate against employees or job candidates for their credit history. Federal law dictates that consumers have the right to know why a credit check was performed and which elements affected the lender’s – or employer’s – final decision.
Credit discrimination is a form of discrimination, and you may have legal options. Contact Eldridge & Blakney, PC for more information.