Can a Maryland employer refuse to hire me because of my bad credit?

Maryland law limits an employer's ability to use credit reports in making hiring decisions.


I'm applying for retail jobs in Maryland, and I've had some debt problems in the past. I just completed a financial "survival skills" class at my local community college, and I've come up with a budget and repayment plan to get back on track. But I'm not going to get anywhere in paying off my bills until I can get a job, and I'm worried my bad credit will count against me. A couple of potential employers have asked me to sign a consent form that allows them to pull my credit report as part of their standard application paperwork. Is this legal? Is there anything I can do to improve my chances of getting a job?


Your situation is all too common these days. Many people have fallen on tough economic times, resulting in higher debts, maxed out credit cards, and negative information on their credit reports. To get out of debt, you need to be earning an income. But debt trouble could be the very thing standing between you and your new job.

Fortunately, Maryland is one of a handful of states that recognizes this problem and has taken steps to solve it. With some exceptions, Maryland employers may not make job decisions -- including hiring decisions -- based on credit reports. Although Maryland doesn't prohibit employers from pulling credit reports for applicants, an employer may check an applicant's credit report only after making a job offer, and the employer may not use the report as a basis for rescinding the offer, setting your pay, or determining any other terms of employment. (An employer who checks your credit must follow the steps set out in the Fair Credit Reporting Act, including getting your consent and giving you certain notices; for more information, see Can Prospective Employers Check Your Credit Report?)

There are two sets of exceptions to the law. First, certain employers in the financial and investment industries are allowed to use credit reports in job decisions. Second, employers may use credit reports in filling certain positions, including managerial jobs and positions that will receive a company credit card or expense account. The law also carves out an exception for positions that will involve access to personal financial information (of customers, for example). However, the kind of personal information used in a typical retail transaction (credit card numbers, for example) doesn't trigger this exception. So, unless you are applying for a managerial job or will have access to more detailed information than usually changes hands during a purchase, potential employers probably can't use your credit report in deciding whether to hire you, how much to pay you, and so on. (For more information on Maryland's credit discrimination law, see Maryland Law on Employer Use of Credit Reports.)

As for what you can do to avoid problems in the future, there are a few things you can do. Now that you know your rights, be prepared to assert them with prospective employers. If you are asked to sign a consent form to pull your credit report, ask when your report will be checked and why. If you are applying for a position that's exempt -- that is, one for which employers may use your credit report -- be prepared to explain that your debt problems are in the past, and you are taking steps to get back on your financial feet.

Also, check your credit report: Many credit reports contain errors and false information. If an employer checks your credit report, you are entitled to a copy; you can also get one free copy per year from each of the three major credit reporting agencies. Comb through the report and notify the agency of any mistakes you find. It's bad enough to be saddled with your own debt problems, but you shouldn't have to pay the price for errors in your report. Check out our library of articles on Credit Repair for help getting started.

Talk to a Lawyer

Need a lawyer? Start here.

How it Works

  1. Briefly tell us about your case
  2. Provide your contact information
  3. Choose attorneys to contact you

Talk to an Employment Rights attorney.

How It Works

  1. Briefly tell us about your case
  2. Provide your contact information
  3. Choose attorneys to contact you