Employers Can Reject New Hires Based On Low Credit Scores Credit History

A friend of ours recently took his Air Force application tests and was told he qualified for every job, except those with Top-Secret classification, because his credit score was too low.

It turns out employers can actually legally refuse to hire you if they don’t like the looks of your credit report.

According to a VISA survey released last week, 80% of Americans are unaware of this.

UPDATE: Maybe they’re unaware because the VISA press release is wrong. Experian credit bureau spokeswoman Maxine Sweet told The Detroit News, “We do not score for employment reports…If you chose to do that, I think you would be breaking the law.”

Some employers believe that one’s credit score is a measure of a prospective employee’s honesty and integrity. We wonder what the CEO of Enron’s credit score was in October, 2001.

“Credit scores have become the de facto ‘GPA’ for all aspects of modern life…” said Jason Alderman, director of financial education for Visa USA— a frightening claim, and one that underscores the credit score’s overreach beyond what it was designed to measure.

A credit scoreCredit history can indicate that you have your shit together, but does having a lower one really mean you won’t be as good at your job?

Americans Unaware That Employers Can Legally Refuse to Hire Job Applicants with Low Credit Scores [VISA via Credit Slips]

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  1. hubris says:

    For most thing I can see it being a stupid measure of potential employee. But for a Top Secret government posting, it makes a little bit more sense. If someone has trouble paying their bills on time, then that could be an opening for espionage, the carrot of money being dangled before them.

    Still not right, and retarded if you’re working at some office job, but I can see the why, even if they need to come up with a better way of measuring that kind of thing.

  2. Beerad says:

    I’m probably way off on this, but I would guess that for Top Secret clearance they don’t want there to be any possible way that you could be corrupted or otherwise betray those top secrets. If you have a history of being irresponsible with money (regardless of whether you’ve mended your wicked bad credit ways since) there’s probably a concern that either you could be swayed to spill your guts to the bad guys for a big suitcase of cash, or that you might be blackmailed by someone threatening to disclose publicly that you declared bankruptcy at some point in your life.

    Not saying it’s justified (although it might be), but I imagine that’s the thought process behind it.

  3. NefariousNewt says:

    My credit is shot — that doesn’t make me work any less hard than anyone else. I can see the premise behind this: you’re behind on your bills, you’re desperate for money, someone offers you cash for some internal information. But I think someone who is susceptable to that kind of influence would reveal themselves in other ways, perhaps not in a job interview, but surely through their actions while at work. If you’re really worried about someone, you quarantine them when they first start — don’t give them access to sensitive material.

    The fact is, no number, be it GPA, IQ, Credit Score, etc. is going to tell you a) how good an employee someone is going to be or b) how trustworthy they are. Someone with perfect credit might still be sucked in by the lure of easy money if someone else offers them enough for the information.

  4. Lonestar says:

    I agree completely, as a USAF member which held that clearance the background checks are exhaustive. In, addition to checking travelling habits, I think this is a good meter for national security clearances to prevent eefi’s violations or potential temptations.

  5. Lonestar says:

    now whether that makes someone not hireable for mcdonalds is another story

  6. Shred says:

    I was recently asked to consent to a credit score check by an employer after I had been hired. I was “asked” in the form of a consent form that was part of the new hire paperwork I was supposed to fill out the first day. I simply told the HR person that I didn’t want to consent to the credit check and then crossed out any mention of my consent to a credit check on all of the contracts before I signed them.

    I think this is a deplorable, practice that unfairly punishes the poor.

  7. Gamby says:

    The thing to remember is that it costs alot of money to do that. Think of how much it costs you to order a credit report with score. Now think about that discounted a little and ordering it for 500 employees. Its not worth it unless it is for a very important position. Also if you go to a job and they are going to do that Im like 98% sure they have to inform you or have it in the consent form you sign when doing a criminal background check.

  8. Benstein says:

    For security clearances, all bets are off in terms of privacy. This is for obvious reasons. It makes alot of sense for companies to pre-screen candidates before applying for a security clearance. This saves them a ton of money to disqualify someone before they pay the thousands of dollars to apply for a security clearance.

  9. godai says:

    If I recall correctly, getting Top Secret clearance costs a company somewhere between $10-20K and financial problems will prevent you from getting the clearance.

    So the credit report is a cheaper pre-screen?

    I have no problem doing the credit check when i’m applying for a clearance position, but I wouldn’t like it if employers had the right carte blanche.

    If you don’t get the job because of the credit rating, do they have to notify you. Or does that law only cover getting turned down for credit cards/loans?

  10. ltlbbynthn says:

    People have bad credit b/c they’re poor. Think about how many kids get a leg up because their parents or somebody cosigns on a loan for them. Now what if your parents are poor and have no credit or bad credit? It’s terrible that anyone checks your credit score for anything, especially with how convoluted the rules are that even people with perfect histories of paying everything don’t have a perfect credit score b/c they don’t have the right number of credit cards. Who’s business is that?!?!

  11. Saboth says:

    People don’t necessarily have bad credit because they are poor. One illness that isn’t covered by insurance can wipe you out. A bad divorce can destroy someone’s credit (my gf has 30k in credit cards that her ex took out during their marriage showing up on her credit score). Sure, I’d say 75% of people with bad credit earned it, but sometimes people hit hard times…and it isn’t right to keep these people from jobs that will help them get back on their feet. To boot, I don’t think it is my employer’s business if I smoke, have weird sex at home, or have bad credit..etc. I show up, I do my job, I do it right…and that’s all they need to know about me.

  12. sporesdeezeez says:

    Yeah, this is sort of a bad example. To anyone who has applied for a job requiring a clearance, this will not be a revelation. However, and no one really knows the specifics except the investigators and adjudicators behind the clearance process, I have heard that the bar is pretty low; that is, you need not have sterling credit to get, at least, a secret clearance.

    TS is another matter, and not all are created equal, either – some require TS with a lifestyle polygraph, others don’t. Not enough information here, but it may have been that this guy had some credit that was really bad, as in, far beyond the standard deviation. Also, supposedly the clearance adjudications are made on a “whole person” basis, so unless they wanted a perfect “whole person,” there were probably other issues with this friend’s background.

    As others have said, the reason for finance checks for clearances is ostensibly to protect information that (rightly or wrongly) the government has deemed “secret” from being disclosed to enemies of the state by means of a tempting bribe. It is not, at least as they tell it, meant to be a measure of potential performance. Only “trustworthiness.”

    Now, I guess every employer has some secret information. Even KFC has a “secret” recipe, so I suppose an argument – however ridiculous – could be made that corporations who in no way deal with national security still have a secrecy prerogative. But as for a gauge of potential performance – no employer who sincerely wants a good performing employee will rely upon a credit check/score alone.

    All in all, I agree with the gist of your post. What distresses me the most is the inaccuracy of the reports credit agencies keep. It is a stunning amount of information they claim to maintain, and it’s well known that they cannot maintain it perfectly, or even reasonably well. Yet as the importance of the metric increases, the need for accuracy is increases – and it’s not there.

  13. Cowboys_fan says:

    I’ve seen job ads requiring these checks for a few years now so its not new to me. What irks me the most is alot of these jobs are call centers(Apple) or jobs that simply don’t pay enough to maintain good credit. I’ve already even tried harrassing my local rep as it is my opinion that this should be considered discrimination. I am not against the idea for top-secret clearance, but a tech job with Apple(example) does not fit that criteria.

  14. sporesdeezeez says:

    Just one more thing – don’t get me wrong as defending the security clearance process. I’m just telling you what I’ve been told and what my research into the issue has told me. Personally, I think the investigation they do detects trustworthiness about as well as dunking detects witchiness.

  15. OKH says:

    @ltlbbynthn:Sorry, but that’s a load of crap. The poor are perfectly capable of making on time payments and not getting in over their heads. I went through a time in my life where I quite literally didn’t know where my next meal was coming from and never once got a call from a collection agency. Stop infantalizing the poor.

  16. wonderlic says:

    I think its a terrible generalization to say people have bad credit becasue they’re poor. I would imagine that by the time you come around to applying for a top secret clearance you’ve had the chance to build a credit history, whether you were born to a family of sharecroppers or on the upper west side.

    I think a lot of times these are pulled to find out if you’ve ever filed bankruptcy. That’s especially true in jobs where you’re in charge of other people’s money. If so, good luck. Its also a huge problem applying to a state bar, and as I recall they pulled my credit report when I applied and it’s a factor they consider. While its not going to help determine how good an employee you’ll be if you’re applying for a sales job it’s likely to have a bit more of an impact on jobs where you’re susceptible to blackmail or where you’re managing someone else’s money.

  17. OKH says:

    @ltlbbynthn: All due respect, but that’s a load. It’s infantalizing the poor to say that they can’t pay bills on time or not get in over their heads. I went through a period in my life where I didn;’t know where my next meal was coming from. Late payments? Zero.

  18. OKH says:

    Oppps, sorry. My message was late posting and i re-posted. (sheepish grin)

  19. Womblebug says:

    I call BS on “people have bad credit because they’re poor”. People have bad credit because they don’t pay their bills. If you know you don’t have enough money to pay for something, don’t buy it.

    The majority of people I’ve seen with bad credit are people who have money and either don’t know how to manage it, or choose to not pay their bill because they’d rather spend the money on a vacation or clothes or whatever.

    Some people are poor because of circumstances beyond their control, but an awful lot of people have no money because of the stupid decisions they make. And honestly, if someone is dealing with private financial information of mine, or classified government secrets, I don’t want them to be of a mindset to use my credit card number or sell state secrets to pay for something because they’ve farked up their finances. If you’re not comfortable having your credit checked for a job, apply for a different job.

  20. Sudonum says:

    I used to make the decisions on hiring and firing for a 60 person department with a Fortune 500 company. This was in the ’90′s, we did run criminal background checks, but not credit reports.

    What possible information relating to employee performance could be found in a credit report that would not be in a criminal background check? I can see not hiring someone for positions requiring security positions or handling larger sums of cash. But for most positions, hearing “We can’t hire you because you’re consistently late on your credit card payments” is just wrong. And quite frankly, as an employer, I don’t care. If you didn’t need the money you I don’t think you’d be looking for work.

  21. Nemesis_Enforcer says:

    When I joined the AF I was fresh out of High school with zero credit. I was given a TS without any issues, heck they made more of a big deal about a speeding ticket I had that was 2 years old!

    I didn’t know about the credit check thing for jobs till I started working for a mortgage company. I started as a temp so no checks there, yet when I went to apply to be a full timer they ran my credit. I was really shocked cause they didn’t do drug testing ut they ran your credit WTF? Anyway I had just been thru a messy divorce and moved half way across the country so my credit wasn’t exactly stellar. At first the company rejected me cause I only had a 615 score. Then my boss went to bat for me and showed I was a good worker. Needless to say I was not happy that the only reason they wouldn’t hire a great worker who had put in numerous 12-14 hour days as a temp was my credit. Luckily it all worked out and my score is much higher now but still it burns my ass that they can do that.

  22. Greeper says:

    Is this really surprising? An employer can hire and fire for any reason except those prohibited explicitly by law (sex, race, religion, nat’l origin, disability, and some others in certain places). If I ran a business, I would want responsible people. WHile not a perfect barometer of responsibility, a credit score is as good a bright line barometer (one that does not require a bunch of work and research) as any.

  23. Crazytree says:

    an individual’s ability to handle their personal finances is directly proportional to their ability to handle the important affairs of others, a corporation or a gov’t entity.

    if you can’t handle paying your T-Mobile account on time…

  24. BK88 says:

    Its true. I just separated from the US Air Force, and I have a TS.
    They run credit check for you to get even a Secret clearance. The first
    two or three posters were correct, its all about the enemy (or friend
    in some cases) not being able to bribe someone to pay off debts in
    exchange for information. Its really a basic security measure for the
    armed services.

    For companies, that’s a whole different matter.

    –BK

  25. Javert says:

    The problem with this article is that it uses, as an example, a job where a credit score may indicate someones suseptibility to outside influence in respect to national security. It then goes on about how it is legal for employers to screen potential employees by factoring in a credit score but it fails to provide examples.

    I know that in the financial industry they check it because of the ease with which might steal. Does this mean poor credit = criminal, no of course not but it does create a possible temptation and why run that risk?

    If someone could post a position for which they know conclusively that a credit score is used as a factor in hiring where it is not necessary, please post it. I am curious. I have not heard of any so this really seems like a non-issue.

  26. sleze69 says:

    @Nemesis_Enforcer: Unlike mortgage companies, lack of credit is fine for security clearances. They are looking at people who have already screwed up their finances as being more likely to violate security.

    Also, don’t apply for a clearance if you’re depressed.

  27. mikeluisortega says:

    Catch 22?

  28. notallcompaniesarebad says:

    @NefariousNewt: “My credit is shot — that doesn’t make me work any less hard than anyone else.”
    If that’s the case, then an employer would be harming itself by not hiring you. It’s easy to sit around and complain about unfair this and discrimination that (not saying you are doing so) but if what people say is true, and that something like this has no predictive value, the company will get its just rewards and end up hiring a bunch of financially responsible, completely useless drones who will drive the company into the ground. Bad credit or not, you can sit back and enjoy the show.

  29. speedwell (propagandist and secular snarkist) says:

    @Javert: Several years ago (before I got into IT), I applied for a job in a commercial real estate brokerage as the person who collects advertisements for the various office buildings around town, prepares presentations, and reads industry websites to analyze market trends. I didn’t directly support the brokers, I didn’t sell, I didn’t have any client contact, I didn’t attend meetings… I didn’t so much as answer phones for the receptionist. The most sensitive thing I did was call leasing companies to find out availability, and call prospects to find out who the decision maker was (mostly they hung up on me). I had no power and no access to anything deal-breaking.

    Nevertheless, they had a sheet in the application package that requested my signature to allow them to check my credit. I lined this out, initialed it, and wrote next to it that I did not agree to release my personal consumer credit records to them for any reason.

    I got hired and started work. Then the office manager called me in and with pursed lips demanded to know why I did not allow them to run my credit. She had the HR director on speakerphone. I told them that I couldn’t possibly imagine how it was pertinent to my job duties since I was not handling money or credit, I didn’t have an expense account, and I had no access to client files. I said that running a criminal record check on me was NO PROBLEM. They finally agreed that I was not a risk to the company.

    Interestingly, the company I now work for gave me a company purchasing/travel card with a credit limit of thousands of dollars a DAY. No credit check required.

  30. etinterrapax says:

    This is old news. In some states, it isn’t legal to base hiring decisions on creditworthiness, but in states where it is, employers can and do seek this information and use it. I agree that the job in the article is a special case where a credit score gives information about the employability of the applicant, but under most other circumstances, it’s a way for a company to make arbitrary assumptions about an applicant’s moral character and base employment decisions on those assumptions, and is entirely discriminatory. I believe that the amount of information an employer should be permitted to obtain about any applicant should be limited strictly to what pertains to the job requirements. Whether someone has or uses personal credit is nearly always irrelevant. It’s possible I would have caved on this some years ago, since it’s never really affected me, but lately it feels like our privacy is under constant assault, and I’m tired of caving, especially for something necessary like a job.

  31. skittlbrau says:

    I had a hard pull on my credit by my employer before I started – but I’m in financial services. This is common across several industries, and its to protect assets (data, clients money, firm money).

    having bad credit is a risk, which companies have every right to try to mitigate. it’s sound business practice.

  32. RandomHookup says:

    I review these reports for my current employers and most of the people with credit problems actually had made good money, but either got in over their heads or lost their jobs and didn’t have any cushion. Of course, I’ve heard lots of sob stories about divorces, too.

  33. mac-phisto says:

    this is not new. i remember applying for a job at best buy 6 years ago & i had to sign a consent form for a credit check. i don’t agree with it for two reason:

    1) the reasoning behind it is flawed (we’ll weed out all those potential thieves!). there are plenty of potential employees that are risky investments for reasons that won’t show up on a credit report -> coke dealers, bookies & barkeeps don’t enter a trade line when you owe them money.

    2) there’s potential for certain information to be used improperly. reports can be dissected to determine personal information that an employer shouldn’t be using to determine employability. for example, a hospital may report you as delinquent when your insurance doesn’t pay what they owe, even if the matter is still being disputed (happened to my mom). an unscrupulous h.r. manager might weed out all applicants with a hospital denotation as a method to avoid people with disabilities or medical conditions.

  34. CumaeanSibyl says:

    I think it’s fair to consider someone with a bad credit score “poor” — in a certain sense. If you can’t pay your bills, and you’re living on credit, then in terms of net worth and financial situation you are most definitely poor. It’s not the same as regular no-money poverty, but it’s a kind of poverty nonetheless.

    Lots of poor people out there who look perfectly good when you meet them casually, who make great money and live well, but on paper you can see the rot setting in. You can make six figures and still be poor, as the people going into foreclosure in high-end California neighborhoods have proven, because you may not just have a low net worth — you might be going into the negatives.

    In that sense, a credit score is somewhat non-discriminatory. You can have two men walk into your office, one wearing a suit from Brooks Brothers and one wearing a suit from JC Penney, and you’ll say “oh, the first guy is obviously wealthier” — but when you pull the credit report, and see that Brooks is about six months away from bankruptcy while JC makes all his payments and has low debt loads, that’s a more accurate picture of who has “wealth.”

  35. remusrm says:

    i have bad credit since my job did not pay me for 3 months when i started… damn LAUSD… then every summer when I work the paychecks come in slow… My last paycheck was 157 bucks… so is it my fault? I try to pay back but i can not since i do not have money. Yes I did get some credit when I should of not but I did pay back and settle. From what i see is that they want you to have bad credit so u can get screwed even more…

  36. 3drage says:

    There are certain federal regulations that require background/credit checks when working for financial institutions. You have to ask yourself, do you want unbonded and possible fraudulent employees working around your money, accounts, and personal information? It should really depend on the situation and what kind of information the employee will be privy to. A person mentioned earlier that this punishes the poor. I have to disagree, people who are skilled and are likely to be required to submit to background checks are rarely lower class employees. At which point, you are then weighing whether or not they make bad decisions with their finances, and whether the might be likely to sell personal information on the side.

  37. Leiterfluid says:

    Ultimately, it’s not about job performance as much as it is about risk.
    When I went to work for a bank in 1994, they told me up front they were going to do a credit check as a matter of procedure. Obviously they don’t want someone with a history of money problems to work in a place where they have easy access to millions of dollars.

  38. ryangoff says:

    For the military at least, I agree with this completely. I was 18 years old in the Navy with top secret information at my fingertips. Swimming in Top Secret information, if you will. If I was $50,000 in debt with that info, then I very likely might want to try and sell it. As for regular 9-5′ers, this makes no sense to me. You get a job to try and get out of debt, right?

  39. mac-phisto says:

    i thought just dawned on me. if i sold the personal information i have access to at my current job on the id black market, i could pay off my debt & my credit score would rise so i could get a better job that requires a credit check!

    woohoo!

    still not seeing how a credit check successfully nets criminals.

  40. Beerad says:

    @mac-phisto: “still not seeing how a credit check successfully nets criminals.”

    It doesn’t, and nobody claimed it did. What it does net is people who have shown themselves to be fiscally irresponsible in the past, and people who arguably have a heightened incentive to desperately need money.

  41. AlexPDL says:

    Why is anyone surprised by this? A potential employer can reject you for a myriad of reasons. Federal, state, and local law clearly delineate a handful of reasons that are not allowed. Everything else is totally fair game. If someone has poor hygine, is short, is ugly, is dumb, or has bad credit… are all acceptable. I am not trying to be mean … life is unfair.

  42. Rusted says:

    Credit reports are scored if someone is a good credit risk ‘and’ active user.

    Makes me wonder since I haven’t borrowed anything in almost three years. Would I be denied a job for paying for everything up front instead of throwing down plastic?

  43. Sudonum says:

    @ BEERAD
    “What it does net is people who have shown themselves to be fiscally irresponsible in the past, ….”

    No, it nets people who have had problems paying their bills on time for reasons which may or may not be relevant to the job they are applying for.

    “…and people who arguably have a heightened incentive to desperately need money.”

    Which still has no relation to their skills and ability to do the job they are applying for, and their inherit inclination towards possible future criminal and/or immoral acts.

  44. axiomatic says:

    Not that my score is bad, but if a potential employer is looking at this versus my 20+ years in computer engineering industry, then I don’t really want to work for them anyway.

    On top of that, the smartest people are generally not street smart. And I think managing you credit falls in the the “street smart” category. You could be excluding the guy who builds the “better mousetrap” and your companies return to profitability.

    This is what happens when you let middle management make policy for your company.

  45. mac-phisto says:

    @Beerad: see, there you go again. nobody wants to outright say “people with bad credit steal shit”, but everybody seems pretty damn good at inferring it.

    another thought…sales managers absolutely LOVE people that are motivated by money. so wouldn’t a person who desperately needs money be an excellent employee choice?

    ohh…one more (sorry, they just keep coming). a couple years back, the u.s. pirg found that 79% of all credit reports contain some kind of error & 25% contain errors serious enough to really screw up your life (like getting denied for a job). with all those errors, is it really an accurate view of prospective employees?

    PIRG report here:
    [www.uspirg.org]

  46. hoo_foot says:

    I have been job hunting over the last few months and have been informed that the employer will look at my credit score as part of their standard background check. However, every consent form that I signed came with a provision that the employer was under legal obligation to inform me that my credit score was the reason I would not be hired. Upon asking employers about this provision, I found out it’s a chance for the prospective to explain their bad credit score. At least this allows those who have bad credit from extenuating circumstances, e.g. giant medical bills, expensive emergencies, etc, to separate themselves from the people who simply can’t manage their money wisely.

  47. Christopher says:

    At my job if I decide to pursue a candidate after an interview, they undergo a credit and background check. I can understand the background check, because I deal with some expensive merchandise, and that will show if they’ve ever been convicted of theft, but the credit has always bothered me. Every manager I know in the company, including myself, has a story of a candidate that would be a great employee, but was rejected on the credit check.

    My company’s reasoning is that they can’t control their money, they might steal to cover future debts. I just feel like it rules out qualified candidates. What if someone is looking for a new job because they lost their previous one (laid off, whatnot), which is how they got into financial troubles in the first place.

  48. Shred says:

    It’s not BS to say that low credit scores are a punishment for the poor. If you don’t have health insurance (if you’re poor you probably won’t) and you have a medical problem, you go to the emergency room and automatically have a medical bill you won’t be able to pay. What are you suppose to do? Refuse to have your broken leg reset and put in a cast? Refuse the Demerol they offer for pain while they do it?

    Or, say, you’re poor and you lose your job. Lay-offs, too many sick days, too many days visiting your kid’s school at the teacher’s request, whatever. Then rent is due. Then your child outgrows her winter coat. You have a friend who’s employer needs some extra help across town, but the car you need to get there blows a tire. “Don’t have the money, don’t buy it” is unrealistic when basic necessities are on the line and banks are all too eager to offer easy credit.

    The subprime mortgage meltdown isn’t the result of a few lazy, immoral or irresponsible people. The cause was predatory lending practices by big name banks–documented by community groups and the independent press well before the story hit Wall Street.

  49. radiationman says:

    Ok, those of you who are complaining about this policy have NO idea what you’re talking about.

    First, as some one who has been through several of these investigations myself and has been through the US Government manuals regarding such things – Here’s what you need to understand.

    Yes to get a government clearance you must submit to a credit check. HOWEVER this is not a situation where the investigators are looking at your credit score. What they are looking for is how much debt you are carrying (in particular do you have say 80k of debt yet your employeement history consists of shelf stocker at the grocery store).

    This is of interest to investigators because such a heavy debt load is considered to put you at risk for coersion from a foreign entity. Money (and heavy debt loads) were the reasons that John Walker and Aldrich Ames SOLD secrets to the Soviets.

    You CAN still have poor credit and get a clearance, it just depends on WHY you have poor credit. If your poor credit is because you don’t have much of a credit history or something similar then odds are your eligibility for a clearance wouldn’t be a problem. If you’re a fan of this site then you probably already know that you can have poor credit yet still be financial responsiblem, the folks who do these investigation know this.

    However, if your poor credit is because you abuse your credit and often try to live outside of your means (many late pays, repos etc…) then you are considered a risk and your eligibility for a clearance may be at issue.

    For a government contractor to screen folks this way is legit. Many contractors are required by the government supply employees for jobs that require a clearance, and as such must be eligible for a clearance. If a contractor can’t supply employees who are eligible for a clearance then the company can and probably will loose their contract.

    Holding a government security clearance is an important responsibility and this policy is fair and just for government folks. People are only granted clearances if they need them, and when they need them regardless of the level of clearance it’s because that they are working with information or material that if compromised would cause damage to national security.

  50. mac-phisto says:

    @hoo_foot: However, every consent form that I signed came with a provision that the employer was under legal obligation to inform me that my credit score was the reason I would not be hired. Upon asking employers about this provision, I found out it’s a chance for the prospective to explain their bad credit score.

    not exactly. the notification that you refer to is mandatory under the fair credit reporting act. in order to be compliant with section 615(a), any person denied based on information in their credit report must be furnished with a notification. here’s a pdf that explains it (page 3) –>[www.ftc.gov]

    they may or may not revisit your application should you provide an explanation for marks on your report, but they are by no means required by law to do so.

  51. Noah_Bodie says:

    87 percent of those who file BK cite one or more of the Big Three: job loss, divorce, medical bills

    Of the remaining 13 percent, at least some cite natural disaster, crime victimization and bad investments.

    It stands to reason that comparable numbers apply for those who are suffering bad credit without filing BK.