Editorial Team | On July 12, 2023
Understanding Credit Checks in Employment
Before we dive into the specifics of the scenario where a job offer is rescinded after a credit check, let’s take a moment to understand the role of credit checks in the employment process. Credit checks are a common step in background investigations for many employers, particularly for roles that involve financial transactions or access to sensitive financial information. Employers often use credit checks as a tool to assess a potential employee’s financial responsibility and personal integrity.
A vast majority of companies, approximately 95%, perform some form of background check on potential hires. There’s a significant focus on financial responsibility as well, with 16% of companies conducting credit or financial checks on all job applicants. Additionally, almost one-third of these firms extend credit checks to certain candidates based on their discretion.
Credit Check: A Pivotal Moment In The Hiring Process
The modern hiring process is not as straightforward as it once was. No longer are employers solely interested in your qualifications and work experience. Today, your financial background, particularly your credit history, can play a crucial role in determining whether you secure a job or not. Consequently, having a job offer rescinded after a credit check is an experience more job seekers are encountering.
Unveiling the Truth: Why Do Employers Conduct Credit Checks?
Before delving into why a job offer may be rescinded after a credit check, it’s important to understand why employers conduct these checks in the first place. In some industries, particularly finance, an employee’s credit history can provide insight into their ability to handle money responsibly. For roles involving sensitive information or access to company finances, employers might be hesitant to hire someone with a poor credit history.
Job Offer Rescinded: Impact of Credit Check Results
If an employer conducts a credit check and finds a number of red flags, such as high levels of debt, bankruptcy, or a history of late payments, they may reconsider their decision to offer you the job. Although it may seem unfair, it’s legal in many states for employers to take this action. This is why you might face a situation where your job offer is rescinded after a credit check.
Your Rights: The Fair Credit Reporting Act (FCRA)
While it’s legal for employers to conduct credit checks, there are still laws in place to protect your rights as a potential employee. The Fair Credit Reporting Act (FCRA) requires employers to obtain your written consent before running a credit check. Furthermore, if the information uncovered during the check leads to negative employment action (like rescinding a job offer), the employer must provide you with a copy of the report and a notice of your rights under the FCRA.
Navigating Through: Can You Fix a Job Offer Rescinded After Credit Check?
While having a job offer rescinded after a credit check can be disheartening, it’s not the end of the road. There are ways to navigate through this difficult situation. For instance, if you know you have poor credit, be proactive in discussing it with the employer before the check. Demonstrating responsibility for your financial situation can help mitigate their concerns.
Rebuilding Your Credit: Long Term Solutions
Addressing your credit issues is a long-term solution that can prevent job offer rescissions in the future. Start by requesting a free copy of your credit report from each of the three major credit bureaus (Experian, TransUnion, and Equifax). This will help you understand what potential employers might see. From there, you can work on improving your credit by reducing debt, making payments on time, and regularly monitoring your credit score.
Engaging Legal Aid: When You Suspect Unfair Practices
There are instances where a job offer is rescicinded after a credit check due to discriminatory or unfair practices. If you suspect that you’ve been a victim of this, you might want to consider legal aid. Employment attorneys can help you understand whether your rights under the FCRA or other employment laws have been violated, and if so, what steps you can take.
In Conclusion: Prepare and Act Proactively
Navigating the modern job market requires more than just a stellar resume and outstanding interview skills. It’s increasingly crucial to be financially literate and aware of your credit standing. By understanding why and how employers conduct credit checks, knowing your rights, addressing potential credit issues proactively, and being ready to engage legal help if necessary, you can turn a job offer rescinded after a credit check from a setback into a stepping stone for personal and professional growth.
You are not alone.
A woman wrote to Woman For Hire to report that she was denied a promising job at the last minute after a credit check revealed some late payments – making her ineligible for hire. Read her story here.
Check out other articles by best-selling authors:
Dawn Rasmussen – Top Five Questions About Resumes Answered
Sunny Lurie – Eight Proven Strategies to Open the Door to a Vibrant New Career
Stacia Pierce – How to Search for a Job During the Holidays
Dawn Quesnel- Helpful Hints for Job Seekers
Stacia Pierce – Conceit vs. Confidence
FAQs
If an employer conducts a credit check and finds a number of red flags, such as high levels of debt, bankruptcy, or a history of late payments, they may reconsider their decision to offer you the job. Although it may seem unfair, it's legal in many states for employers to take this action.
How do you respond to a job offer rescinded? ›
What do I do if my job offer was rescinded?
- Make sure you understand what happened. ...
- Ask about other options. ...
- Give yourself time to process. ...
- Tell people what you're going through. ...
- Consider asking for your old job back (if you want or need it). ...
- Try not to beat yourself up.
If you accepted a job offer and the employer rescinded it (took it back) before you started work, you might have legal claims for breach of contract, promissory estoppel, or even fraud.
Has anyone had a job offer rescinded after background check? ›
If an employer learns information through a criminal background check after a conditional job offer, it can rescind the offer only if there is a direct nexus between your criminal conviction and the job, or if you would present an unreasonable safety risk.
Can a credit check stop you from getting a job? ›
You can be denied a job because of your credit, but you do have rights, thanks to the Fair Credit Reporting Act. Here are the steps employers must take, as required by this law: Notification and permission: An employer must notify you if it intends to check your credit and must get your written permission.
Can a job offer be rescinded after employment verification? ›
If a background check reveals information that a company deems inappropriate, then they might rescind an offer. This reason could include incorrect or misleading information on the original application.
Why would an employer rescind an offer? ›
The decision to rescind a job offer must be permitted under applicable law. The following are examples of situations where an employer may wish to rescind a job offer: The candidate fails a legally required drug test. The company can no longer afford to hire a new employee due to budget cuts or financial instability.
How long does a company have to rescind a job offer? ›
Generally, this means that when an employer makes an offer of at-will employment, the employer is free to rescind that job offer, for any reason or no reason at all, at any time, including the period after the potential employee has accepted the offer but before he or she begins work, without legal consequence.
Can you sue a recruiter for lying? ›
You can sue for negligent misrepresentation when: The job agency makes a misrepresentation of a material fact (e.g. by lying about a prospective employer's credibility and inflating their poor reputation).
Is it unethical to rescind a job offer? ›
Although rescinding a job offer is not necessarily illegal, there are risks for an employer to consider. Steady progress in the job market means employers are extending more job offers and more candidates are accepting. Sometimes, however, an employer must withdraw an offer.
Yes, you can sue, but you are unlikely to prevail in the lawsuit against your former future employer unless they rescinded the offer for unlawful reasons.
Can an employer decline a job offer after a background check? ›
Once the offer has been made, the employer may inform the prospective employee that the offer is contingent upon a successful criminal background check. If the background check returns some criminal history, an employer must complete the “fair chance process” before revoking the offer.
Do companies rescind job offers for negotiating? ›
If you're respectful, realistic, and strategic when negotiating salary, there is little risk that you'll lose the job offer entirely,” said Cole.
Can companies not hire you because of bad credit? ›
The general rule in California is that an employer may not consider acquire or consider a person's credit report in making job decisions except for applicants for or employees in: managerial positions. positions with the state Department of Justice. law enforcement positions, including peace officers.
What is the minimum credit score for a job? ›
There is no minimum credit score for a job. Employers do not even have access to your score but some may check your credit history as part of the hiring process, especially if the job involves financial responsibilities or access to sensitive information.
What does an employer credit check show? ›
Though prospective employers don't see your credit score in a credit check, they do see your open lines of credit (such as mortgages), outstanding balances, auto or student loans, foreclosures, late or missed payments, any bankruptcies and collection accounts.
How do you respond to a withdrawn application? ›
Step 1: Acknowledge the Withdrawal
A great response will be professional, genuine, and honest, something like, “I appreciate you letting me know. We are all disappointed, and if there is anything we could have done to change your mind, please feel free to share that with me.
How do you email an offer rescinded? ›
Template Email
Dear [Candidate/Applicant], I'm sorry to let you know that we must withdraw the job offer we had previously made to you for the [Job] position at [Company]. We sincerely apologize for any trouble or disappointment this may have caused you, as this choice was not taken lightly.
