Tough economic times have a way of compounding problems. What happens when the unemployed can no longer pay all of their bills? Unfortunately, a debtor’s story of woe is probably not going to be enough to keep a creditor from reporting late payments or an account in default. When that happens, finding a job with an employer who runs credit checks can be difficult, if not next to impossible.
The Denver Post has a story this morning about the effect that such credit checks can have on the unemployed. Once the vicious cycle begins, it is difficult to stop. Some states are taking measures to stop this practice, and a bill was introduced last summer in Congress, where it is still bottled up in committee.
I’m not sure an outright ban is the answer. There are certainly jobs for which the employer would want to know about a prospective employee’s financial history, like a bookkeeper or accountant, for example, or anyone who is handling money. Short of that, there doesn’t seem to be a compelling reason to run a credit check.
Colorado has not yet banned such checks, nor do there seem to be any pending proposals to do so. While some blemishes on your credit report may not be avoidable, it’s important to avoid those that are, like judgments. If you are sued by a creditor, be sure and respond to the lawsuit. Do not simply ignore it. Try and negotiate a payment plan to avoid garnishment. If possible, ask the creditor to stay entry of judgment unless you default on the new payment plan. This will keep a judgment from showing up on your credit report.
Mon, Mar 8, 2010
Consumer Law, Debt Collection, Legal News, Workplace