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Credit card debt could hurt your job prospects

When a person falls behind in their credit card payments, the delinquencies show up on their credit report. This can have a number of serious consequences for a Massachusetts resident, including the inability to get a mortgage or car loan, rent an apartment or find a job.

Many employers today review job applicants' credit reports as part of the hiring process. Under the Fair Credit Reporting Act, they are required to get the applicants' permission before obtaining the report. But nothing in the FCRA prohibits an employer from refusing to hire an applicant, or even from firing a current employee, because of negative information in a credit report.

Denying a job to a qualified applicant based on information in a credit report may be unfair, to say the least. Most people who have fallen into hard financial times did so through no fault of their own. They may have lost a job or a house during the Great Recession or suffered a serious illness that resulted in overwhelming medical bills.

Personal financial troubles should not have any bearing on whether a person is able to perform a job. Unfortunately, many employers don't see it that way, and routinely use credit reports to screen prospective employees. For those who don't get hired, the inability to find a job makes a bad financial situation even worse.

Filing for bankruptcy can provide a way out of this vicious cycle. A bankruptcy will have a negative effect on one's credit, but without filing bankruptcy it could take a debtor a decade or more to get out of debt and repair their credit, if they can do it at all. In many cases a fresh financial start through personal bankruptcy can lead to an improved credit score sooner.

Source: workplacefairness.org, "Your Rights: Credit Checks," accessed May 21, 2016

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