Can Bad Credit Effect Whether You Get That New Job Or Not?

Did you know, 1 in 10 people have been denied a job due to information on their credit report. 1 in 4 unemployed Americans have been required to go through a credit check when they applied for a job!

If you are applying for any of the following typesHire me! of jobs, expect to get a credit check!  These jobs will regularly check their applicants credit:

  1. parking booth operator,
  2. the military,
  3. accounting,
  4. mortgage loan originator,
  5. Transportation Security Administrator (TSA),
  6. law enforcement, and
  7. temporary service positions.

The importance of having a good credit score is often emphasized.   Some people reason out that they really don’t care much about their credit score because they’re not applying for credit anyway.  However, your credit score isn’t just for getting approved for loans or credit cards.It isn’t just about getting lower interest rates and more credit privileges.Your credit score also plays an important role in how employers judge you and ultimately, in getting the job that you want.

Yes, this is one of the reasons why students are encouraged to establish their credit history early and keep it in good standing.Thus, by the time they graduate and enter the corporate world, there is a record of how they have handled the responsibility of paying credit cards and loans.

The truth is, more and more employers use your credit report to check on your background and credibility. When making judgment calls on a person’s attitude and sense of responsibility, the status of one’s credit report seems to be an accurate tool to use.  If you think this only applies to the executive level, you may be surprised to learn that many employers are pulling a credit report to fill entry level positions.

According to a survey done by Harris Interactive for Spherion Corporation- a leading recruiting and staffing company, employers who screen employees based on their credit has increased by 55% in 2006 than six years ago. Employers use credit reports as a more reliable source of one’s personal information. Nevertheless, a bad credit score may create a negative impression to a prospective employer.

Put yourself in your employer’s shoes. Would you likely hire an applicant with a credit history that is filled with a record of charge offs and unpaid past due bills. If other applicants with the same range of qualifications present a more impressive credit report, wouldn’t you be more inclined to hire someone with a better credit score?  Wouldn’t a credit report reflect an applicant’s ability to handle responsibilities well?

Yes, its unfair, since sometimes having a low credit score isn’t your fault.  When you apply for a job and see on the application that they are requesting permission to pull your credit, make sure your cover letter “TOUCHES” on what can be found on your credit report.  You don’t want to go into a “sob story”.  But here is your chance to turn a negative into a positive!

If you’re really serious about getting hired, you should strive to make the best impression. You want to get an edge over your fellow applicants in every way possible. You don’t want your credit report to be the only factor to stop you from getting hired, especially if you possess the right skills and competence for the job.

Although the Federal Law prohibits an employer from refusing an applicant solely on the basis of their credit, you can’t deny the fact that your credit rating can affect the decision of an employer on whether to hire you or not.Therefore, the best thing to do is to maintain a good credit score.  Not only to avoid employment problems, but also to prepare you to make it easier to obtain loans and credit cards.

4 comments

  1. I think that it is improper for prospective employers to run credit checks on employees. I understand running criminal checks to see if an employee has a criminal records. But in my opinion, they don’t have the right to dig into my personal finance.

    I think the reason why we all go to work is to be able to pay bills like a responsible person. So companies should understand and give people with bad credit a chance and hire people on their experiences and capabilities not how much in their pockets.

  2. I agree with Shiela

    A bad credit history can have many reasons. Family emergencies that incurred debt, selling a house with a loss or a more current problem: job loss. All are possible contributing factors of one’s ability to repay debt. A lack of ability is not the same as lack of responsibility. Some people are out there racking up credit cards knowing darn well they have no intentions to pay back. But there are others that rely on using credit cards and loans to secure survival. The problem though is, that both groups will become diliquint with their credit accounts and are being categorized with the same negative credit rating. Now, does that seem fair? Should a bad credit history keep me from getting the job I am qualified for? My answer is NO. My job skills have nothing to do with my personal financial situation. As long as the credit reports fail to differentiate between the two groups of dilinquints, I believe a job offer should not be hinged on a credit report.

  3. I think it’s absolute RUBBISH that my personal credit has any bearing on my work performance or whether or not someone is responsible. That is laughable. Actually, it may ENHANCE my determination to do my duties so I CAN PAY OFF MY DEBTS. What is determines is that either a) I come from a rich family and they help take care of the bills when you need them to (I have a number of friends who fall in this category) b) I have never been laid off from a job and had to go on EI so my bills got behind. Credit has nothing to with my ability to perform my duties at work whatsoever.

  4. EXACTLY!!! It so depressing and frustrating the idea that an applicant has been denied because he/she has a bad credit. Why don’t companies try to look into the applicants capabilities, intelligence to show and serve the company. It is so unfair if they base it with his bad credit.

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