Having a poor credit history can further complicate an already difficult job search process. Yet, as with many job hunt obstacles, bad credit can be easily overcome if you approach it strategically.
Having bad credit can affect more than just your credit score. It can also change the way potential employers see you as a job candidate, particularly if you are in the finance industry. Sometimes bad credit can be a vicious cycle—you have debt because you need a job, and to secure a job it’s better to be out of debt. However, there are ways to protect you, and still stand out as a valuable candidate.
Check your own credit.
Each nationwide consumer reporting company—Equifax, Experian, and TransUnion—is required by the FCRA to provide you with a free copy of your credit report at your request every 12 months. For information on how to receive one, visit ftc.gov/credit. It’s a good idea to monitor your credit report regularly. If there are mistakes on your credit report, address them immediately with creditors and the reporting company.
Know the law.
According to the FCRA, or Fair Credit Reporting Act, which is enforced by the Federal Trade Commission and state Attorney Generals, an employer must get your permission before looking at your credit report. If you interview for a job and do not receive it because of your credit report, the employer must show you the report and tell you how to get a copy from the consumer reporting company. If you request this within 60 days, there is no charge to you for the report.
Why do companies care?
Some employers fear that credit problems could carry over into the workplace if employees feel worry, fear, and stress over credit; they also consider it a measure of your responsibility, character and judgment. Employers also don’t want to garnish wages or have people bothered at work by collection agencies. Moreover, as a finance employee, you want to demonstrate your understanding of good financial
What if you have bad credit?
If you are offered a position pending a credit check, remember that at this point the employer does want to hire you. Consider speaking up and saying something such as, “I would like to tell you in advance what you will find on my credit report. Please allow me to explain a few things…” Sometimes people have bad credit because of a life event or maybe you made mistakes you are ready to fix. Being open and direct before the check will put you back in a positive light.
If your credit is less than excellent, start taking steps now to improve it. And, when you are ready to interview, understand an employer’s policy on credit checks. If they are part of the process, be ready to discuss your credit score. Practice this so youare not caught off guard. Remember: If you get to the point where an employer checks your credit, you are already a serious contender for the job.