CanI not be hired due strictly to my credit history?

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CanI not be hired due strictly to my credit history?

I have been interviewing with a non-profit company over the past few weeks. Their HR sent me a bunch of paperwork to fill out and I completed it and sent it back. I was then called by the HR they advised me that they would like to hire me but are having an issue with my credit history. Giving you my background, I have been self employed in real estate for the past 9 years. In 2007 when the economy started to turn I found myself without renters in 2 of my homes and jobless. I lost 3 homes total that year and 2 of the lenders filed deficiency judgments against me. I also recently received a notice from a debt collector from 1 of my credit card companies saying they too had filed a personal judgment against me. I plan on filing Chapter 7 once I’m back making a steady paycheck and can afford the legal fees. The company that has said they are interested in hiring me is a non-profit group that works with distressed homeowners who have tried working with banks to restructure their loans but had no success. That being said, they should understand I too had been in the same boat and see that is what acounts for my last 2 to 3 years of bad credit (prior to that I had over 800 scores and owned 3 homes as a single woman). Do I hold any rights to sue if they say they are unable to offer me the job based on my credit history after the fact they said they would like to move forward with the job?

Asked on August 24, 2010 under Employment Labor Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

No, unfortunately, as unfair it seems--and I agree, it IS unfair--companies are allowed to check credit history during the hiring process and to use credit history as a factor--perhaps even THE factor--in making employment decisions. More generally: employment is employment at will, which means that a company may make employment decisions based on any grounds not specifically made illegal (e.g. no discrimination on the basis of race, sex, religion, age over 40, or disability). However, the use of credit information in hiring has not been made illegal, and this is a huge societal problem for many people at time of high unemployment, declining asset values, and self-employment.

Speaking of self-employment: if the company is loathe to hire you as an employee based on your credit, could you possibly get them to consider retaining you as an independent contractor, as least initially? That would let them work with you without violating whatever internal guidelines or standards they have for hiring.


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