Video: Credit checks and jobs

There were 159 million credit cardholders in the united states in 2000; 173 million in 2006; and that number could reach 181 million by 2010.

Your credit history determines just about everything: whether you’re able to buy a house, a car or even a new pair of jeans.

And you may not realize this, credit could determine whether you get a job or not.

Although each of us is clearly different, we all have at least one thing in common. Even though that too is vastly different - we all have some form of credit.

UAB graduate student John Carmichael will be looking for a job soon. He said he only recently started paying attention to his credit score.

Once he’s done with school, he will have racked up close to $25,000 in loans.

He needs a job to pay that back, and he doesn't want credit to stand in the way. Carmichael said, “I wouldn't think your financial history would have anything to do with you trying to get employment, but obviously it does.”

Certified financial planner Scott Cole said more and more employers are doing background checks than ever. “People are looking at credit for employment purposes on more occasions.”

Cole says the checks are used as a barometer for hiring, especially for specific types of jobs. “Particularly for jobs that dealing with something valuable, particularly like finance. If you're going to be dealing with money, say, you're going to be a cashier or if you'll be working with some type of money, they're going to look into it.”

Rod Carter did some research online and found a few articles about credit and jobs. Though the numbers vary about how many employers dig into credit history before hiring, one article shows an interesting fact.

According to the Society for Human Resource Management, about 43% of U.S. employers check job applicants for overdue payments on anything from mortgages and rent, to credit cards and student loans.

Compare that to five years ago in 2004, when only 36% of companies did credit checks.

Dr. Cynthia Lohrke of Samford University’s School of Business said, “What they usually do it for, is a measure of responsibility.”

Dr. Lohrke said credit history can reveal a lot about people, and some employers may wonder if bad finances, means a proclivity to steal. “If you're handling money they might worry you're under increased pressure in terms of your finances.”

So you may be thinking to yourself, ‘Don't I have to authorize someone to take a look at my credit?’ You do. By law, an employer can't do that unless you give them the go ahead, which you may be doing each time you fill out an application.

On the application at a fast food restaurant, the last line clearly states, by signing this, “I understand as part of the procedure for my employment application, an investigative consumer report may be made concerning my character, general reputation, personal characteristics and mode of living.”

And that could stand in the way of getting a promotion too.

But these days, with the economic turmoil the country is in, credit is tighter than ever. People are getting laid off, bills are getting behind and homes are in foreclosure.

That’s why some people, like Elizabeth Daniel, believe using credit to determine hiring is not a good thing right now. She said, “I feel bad for people that can't a job for that reason, cause a lot of people's credit score is low.”

Dr. Lorhke says her best guess is most employers will be understanding about that, “They are aware that some people's credit is being affected by the tightening of the credit and so they are much more likely not to use that against you.”

There are some things you can do to try to keep your credit score up. Get copies of your credit report. Then verify the information is correct, and pay your bills on time.

Scott Cole advises. “You need to use your credit and use it responsibly. Pay your bills off. There's nothing wrong with having some debt, but what you want to make sure you're not utilizing so much of your credit. So keep your debt manageable.”

If you apply for a job and don't get it job because of credit issues, by law, the employer must tell you and provide documents to show why you weren't hired, especially which part of your credit is the problem.

John Carmichael says he’ll be aware of that as he launches his job search, “I'm paying far more attention to it than I used to.”

He’s doing whatever it takes to keep his credit score high, and his job prospects even higher.