NYC Bans Credit Checks – Employment and CreditThe main reason NYC Bans Credit Checks as to why you have a credit score is a simple one – it’s a way for lenders to gauge your financial history to determine whether or not you’ll be able to reliably pay them back. Obviously, a poor FICO score indicates that you’re not an ideal candidate and there’s inherent risk, while a good score indicates the opposite. But did you know that the majority of states also permit employers to check the credit scores of potential employees as a means of measuring the same thing? Whether you deem it fair or not, the fact is that most states allow pre-employment credit screening. But New York City made headlines in April 2015 when its city council passed a bill prohibiting credit checks for employment. The belief, of course, by New York City council members – as well as officials in California, Washington, Nevada, Oregon, Connecticut, Delaware, Hawaii, Illinois, Maryland, Vermont who have adopted similar legislation – is that one’s credit score is not a valid representation of whether someone will succeed in a professional position. Furthermore, proponents argue that credit checks can lead to discrimination among low-income or financially challenged individuals, which can actually damage credit on a whole.
ExceptionsAlthough it’s illegal for employers to conduct pre-employment credit checks on potential new employees in the states and municipalities mentioned above – as well as a handful of others – it’s worth noting that some exceptions apply. For instance, law enforcement positions and jobs that require state or federal clearance, are examples of instances where credit checks aren’t just recommended – but required.
Maintaining Good CreditAs we told you, the vast majority of states still permit employers to check credit scores of potential employees. And while maintaining a good credit score is important for non-job related reasons, if you live in these states, having good credit is also potentially essential to becoming employed. With that being said, here’s a look at some good tips to keeping that credit score of yours up:
- Pay bills on time: Your payment history accounts for 35 percent of your overall credit score, the single biggest category. Paying bills on time is a big part of that. Do what you have to do to get this done.
- Keep amounts owed down: In general, it’s best to keep your amounts owed under 30 percent of your overall credit allotment to ensure a better score. If you have debts to pay down, always put more toward high-interest loans first.
- Take out different types of credit: One of the factors that goes into a credit score is the types of credit you’ve utilized. In general, the more the merrier (i.e. mortgage loans, auto loans, credit cards, etc.)