While most people know a weak credit score can hurt their chances of getting a home loan, just 20% of your job candidates know that a bad credit score can harm their chances of getting a job.
According to a new Visa USA survey, the overwhelming majority of today’s job seekers have no idea that many employers have made checking a credit score part of the job application process, similar to drug testing or criminal background checks.
Jason Alderman, director of financial education for Visa USA, points out that “a bad credit score can send an otherwise well-qualified job applicant straight to the unemployment line.”
In fact, this is entirely legal under the Fair Credit Reporting Act.
Still, the Privacy Rights Clearinghouse contends that this law contains loopholes that employers can use to avoid notifying the applicant that negative information in the background investigation resulted in their not being hired.
The Visa survey finds that 52% of Americans mistakenly believe it is illegal for prospective employers to use credit scores as a hiring criteria, and 28% are unsure.
Visa’s survey of 1,000 adults nationwide shows that 42% of consumers 18 and older have never even checked their credit score.
The survey also shows that more women (59%) have checked their credit score than men (51%). Adults age 55 and up have checked their score at a far lower rate (43%) than those under 55 (62%). And only 22% check their credit score once a year.
About 18% check their score two or more times each year.
Visa released the survey results as part of the educational initiative What’s My Score?, a program to improve the financial literacy level in America.