As more and more individuals face being denied gainful employment due to poor credit history, lawmakers from a growing collection of states across the country are moving to ban the use of credit reports in hiring decisions.

In previous articles, we covered how the practice of utilizing an applicant’s credit history works. Because of liability concerns, many former employers won’t offer much these days besides an employee’s dates of hire and position held. Not a lot to go on if you’re a business owner.

Employers are taking a look at an applicant’s credit histories because they say that a measure of the individual’s honesty, reliability and maturity can be inferred from their past financial management. 

The problem is that although there are deadbeats and irresponsible individuals with bad credit, there are also individuals who through no fault of their own have acquired debts resulting from situations completely beyond their control. A child falling ill, a factory layoff, a missed payment or two on student loan…it’s not as though these people went out of their way to place themselves in these situations.

And what happens next? You fall on hard times; you work to get yourself out of them only to find you can’t because no one will hire you based on a poor credit score.

Although an employer needs an applicant’s permission before running a credit check, it still puts a job seeker in a tough spot. Option A, you give permission and offer up information that could hurt your chances of getting a job or Option B, refuse the check and incur suspicion thereby hurting your chances of getting that position.

This has not been lost on state delegates and lawmakers who want to ban credit checks from the hiring process. More and more states are conceiving laws that will open doors wider for those with poor credit history. 

16 states from Oregon to South Carolina are all now in varying stages of implementing bills that would effectively ban credit history from being taken into consideration on job applications. A bill encouraging a ban on a national level was introduced by Rep. Steve Cohen from Tennessee in the summer of 2009 and is currently languishing in the purgatory of committee review.

Kirill Reznik is a Maryland delegate who is responsible for drafting a bill in his state currently under consideration. He thinks credit history places an unfair burden on those who want to get back on their feet: “We are in the great recession and this creates a vicious cycle. People lose their jobs, that naturally precipitates them, getting behind on bills, their credit scores go down, they are trying to find a job to pay off bills, and employers won’t hire them because of their credit score.”

Kim Hixson, Wisconsin Rep, said, “If somebody is trying to get a job as a truck driver or a trainer in a gym, what does your credit score have to do with your ability to do that job?”

The counter argument from employers is that the real red flags they are looking for are debt collections and legal judgments on a person’s record rather than school loans and medical bills. Mike Aitken of the Society for Human Resource Management said that a ban would deprive hiring managers of an effective hiring aid.

Aitken was noted for saying that although a faulty record of paying bills on time may not indicate they’re a thief or fraudster, but it could offer insight into whether they have the maturity and responsibility to handle an adult working position.

Kim Hixson disagreed saying that she has never heard of a concrete study that can offer a correlation between poor credit and poor job performance.

What needs to be understood, and I don’t think many of our government representatives are “getting” is that it currently is not legal to use a credit score to determine employment.  A pre-employment credit report simply gives an employer an overview on how a person handles their finances.  There is no score reported, nor does a check for employment purposes take any points away from a person’s current score.

The concerns of employers are justifiable.  They risk damaging their own business not having the tool to assist them in making a smart hiring decision.  Granted, while credit reports shouldn’t apply to all positions, they definitely should be made available for positions which deal with money.  Would you put someone in charge of your finances who can’t manage their own?

Consistent orders and production are giving manufacturers reason to thaw hiring freezes and potentially recall laid-off workers.

Economic recovery has started to glimmer a little brighter in a recent front page report by The Wall Street Journal. Consistent orders and production are giving manufacturers reason to thaw hiring freezes and potentially recall laid-off workers.

Encouraging factory output figures are appearing across several industries such as apparel, appliances and automotive goods. Factories, in fact, seem to be the big bright spot for the first quarter of 2010 with 11,000 new jobs added in January.

The big gain in industrial production hasn’t been lost on the Federal Reserve which acknowledges tangible gains on the road to economic recovery. That in turn may lead to the reversal of emergency policies set into place during the worst months of the downturn.

Allen Edmonds, a company specializing in high-end men’s shoes, began noticing business picking up in October. Although initially regarded as a fluke, business remained consistent with overtime required to fulfill orders by December.

Chief Executive Officer, Paul Grangerd, remains optimistic his companies fortunes will continue to thrive moving forward, “We depleted our inventories much faster than expected and ended up working overtime in December just to catch up and have been working overtime ever since.”

Electronic producer, LaBarge, Inc, is also seeing an upturn in business. Craig Labarge, CEO, reported, “Order inflow has really improved compared to a year ago.”

LaBarge is beginning to add to its 1,500 member strong workforce and iS looking to add upwards of another 100 employees over the next year. Mr. LaBarge’s attitude is unlike many other business owners these days.  He stated, “Every day that goes by we get a bit more comfortable.”

However, optimism was tempered with caution by the Federal Reserve whose report released last Wednesday indicated little downturn in the current unemployment rate of 9.7% for the remainder of 2010.

Additionally, the Federal Reserve said, “The pace of the economic recovery will be restrained by housing and business uncertainty,” as well as “only gradual improvement in labor market conditions.”

Scott Wine, CEO of Minneapolis-based Polaris Industries, which produces snow mobiles and opther vehicles, said “We are starting to see demand come back, but we’re trying to look at ways to make sure we don’t go out and get ahead of ourselves in terms of hiring and expenditures.”

Like any serious injury, sometimes a painful and slow recovery process is required for one to be back at 100% again. Being in the midst of that recovery can be frustrating, but it’s the tangible signs of recovery that keeps one going.

As a nation, we’re beginning to walk again economically, but it will require time before we can run.

Let a professional background screening agency like Iamscreened.com can research your old employers and verify your dates of employment and title for you.

You would think that the bigger the company you work for, the easier it would be to use it as a reference when you apply for a new job down the road. I mean, it’s a huge multinational company and anyone can approach Human Resources to verify your employment right?

Sadly, this isn’t always the case.

Large corporations and businesses typically have very restricted access to their Human Resources Department. For starters, it’s a simple matter of business security.  Additionally, the bigger the company, the more people you’re going to have beating on HR’s door for all sorts of matters be it employment, grievances, references and benefits:

“Are you considering my application yet?”

“Are you hiring? What positions are available?”

“Did this employee work for you?”

As a result, it makes it a lot more difficult for your potential employer to determine your previous dates of employment and title if you don’t give them a little assistance.  If not, they’ll be out there with the rest of the mob clamoring for a way in.

Paving the way for ease of reference into your employment history will do wonders for your application process. As opposed to having to hurdle all kinds of roadblocks and dead ends, your efforts can ensure your references are checked without delay.

I had a friend who always made sure to get the names and contact information of two supervisors and the department contact information for either Human Resources or Payroll whenever he submitted a two week notice.

When he submitted the application for the new company for which he was applying, he was able to provide defined points of contact from his old companies which could be called immediately for verification of employment. It shaved days (and perhaps weeks) off the application process.

Not only did he ensure his employment verification process proceeded quickly, but also his new company was grateful for the fact they didn’t have to navigate a maze of gatekeepers, phone menus and call centers trying to find the right avenue for verifications.

Furthermore, do your research on exactly how your company does its verifications. Is it done over the phone? Is a fax and verification release required? Are verifications outsourced to an automated, third party service like The Work Number for Everyone? Know these details! They can make a big difference.

Naturally, there may be constraints or instances in which you just might not have the time to gather the reference information you need. For a low fee, a professional background screening agency like IAmScreened.com can research your old employers and verify your dates of employment and title for you.

Verifying employment doesn’t have to be a pain for you or your new employer. With a little foresight and preparation, you can ensure a speedy verification process that can ensure your first day at the new job comes about a lot faster.

Could a history of bad credit, debt and financial mismanagement have an effect on your potential employers’ decision to bring you on as a member of the team?

Could a history of bad credit, debt and financial mismanagement have an effect on your potential employers’ decision to bring you on as a member of the team? The answer is increasingly “yes” as more and more employers are taking their applicants credit histories into consideration when extending an offer of employment.

Credit checks have largely been the tools of banking and other businesses in the financial industry as far as being part of the application process.  After all, you think “credit report” and you assume “Oh, well, I’m not handling money or finances so I don’t think I have to worry about anything.” Are you sure about that?

A new hiring trend in the past few years shows companies outside of the financial sector are seeing credit checks as a way of measuring personal integrity and honesty. Resumes may give an employer a good assessment of a candidate’s skill set, but a credit report is said to reveal elements about someone’s personality not stated in a cover letter.

A recent story by Boston.com regarding credit checks entering mainstream employment practices cited a statistic produced by staffing and recruitment company, Spherion. The statistic revealed that over the last five years, credit checks have increased 55% among U.S. employers. Definitely not chump change as far as percentages go.

Carl Greenberg, Vice President of Spherion, a staffing and recruitment firm, said, “The credit check has become a general measure of responsibility and organization.”

Companies now order credit reports to see what kind of life a person is living and whether that could translate into a liability for the company.  After all, given the expenses with hiring, training and sustaining an employee, hiring choices need to be on the mark especially in the new economy where every dollar counts.

Does this seem terribly invasive and inappropriate? Do companies have the right to do this? Well, employers are prohibited by law from utilizing someone’s credit score during an employment screening process. In fact, the types of credit reports available to an employer will never release a credit score and, in fact, don’t deduct points like a general credit inquiry.  This tool is used to show how an individual handles their finances, overall.

Nancy Pulliam Weston, columnist for MSN.Money said, “Some employers are convinced that people who manage their credit well are better workers than those who don’t.”

Although Federal law does require employers to receive a candidate’s written permission before performing a credit report, many companies make such checks more or less mandatory. The logic is that if an applicant doesn’t agree to a credit report screening, they obviously have something to hide.

However, the process can over generalize someone’s information and not bother taking extenuating circumstances into account. The practice could (may have already) disqualify otherwise talented and viable candidates.

Many people with poor credit have found themselves victims of circumstances beyond their control and have found their credit suffering as a result. Someone might be saddled with student loans, medical bills, victim of identity theft, laid off from their company, etc. These are people for whom a paycheck can make or break one financially.

The credit report continues to take a greater role in the hiring process and as it does, employers need to weigh its importance carefully when considering an applicant. The generalization of someone’s worth based on a poor credit score not only deprives someone of a chance to get back on their feet, it might also be costing a company the opportunity to build a skilled and talented workforce.

The secret shopper scam comes across as so legitimate, you might not even know you’re being scammed at first.

For many, being a “secret shopper” has proven to be a fun and lucrative way to make a little extra money. Unfortunately, the rise in unemployment has seen a rise in employment scams  and that means there could be a secret scumbag behind that offer to make you into a secret shopper.

To bring some of you up to speed, being a secret shopper means going undercover as a customer at a select store or business and recording the entire experience. The data you collect and are subsequently paid for translates into a valuable marketing tool for interested parties.

However, a secret shopper scam comes across as so legitimate, you might not even know you’re being scammed at all. Many start off with a formal interview process over email with individuals being told to submit resumes for the purpose of a background check. You even receive official directions to shop at an actual store.

The trap springs shut once you’re done and flush with the excitement of a job well done and the promise of money on the way. Just one small detail to take care of and that’s your account information so your payment can be directly deposited.

In reality, the crooks just get direct access to your personal information and, voila, you’re a part of a growing number of identity theft victims.

The FBI says other versions of the scam involve counterfeit checks and wire fraud. The really lousy side of this is that it takes advantage of decent people looking to make a little extra cash in these difficult times.

Don’t let these vultures get close enough to work their scam on you. The following is advice to protect you or someone you know who might be looking to cash in on an email offer that sounds too good to be true.

Do your research! Not all secret shopper positions are phony and careful research online can help you determine the real deal versus a bogus operation.

Don’t reply to spam email.  Ever.

You should avoid clicking on links inside unsolicited or unknown email.

Don’t fill out forms in email messages that ask for your personal information.

A reputable business won’t ever charge an application fee.

If your secret shopper assignment includes a sent a check for “payment in advance” and you are asked to send a portion back, treat that as the mother of all red flags and stay away!

Believe it or not, there are legitimate operations out there that can provide you with a valuable secondary income. Do your homework, know what you’re getting into and be as miserly as “Scrooge McDuck” when it comes to your personal information. By doing so,you’ll effectively debunk secret shopper scams and other employment cheats.