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Employer Credit Check: Bad Credit Score vs. Dream Job

Credit Score Affect Your Job Hunting

The competition in the job market is on its hike. What worked 20 years ago when trying to get a job won’t work today. Without a doubt, job hunting can become a hectic routine unless you know how to strategically play the game.

In this new world, the one who gets hired is not necessarily the one who can do that job best. More often, the one who knows the most about how to get hired.

The truth is that a credit check is a trend in the business world today. A survey from NAPBS, the National Association of Personal Background Screeners claims that 95 percent of companies do some type of credit check on job candidates.

In fact, 16 percent of those do credit or financial checks on all job candidates. For your information, on July 11, 2019, the U.S. House Committee on Financial Service has passed the Act titled “H.R.3614, the Restricting Use of Credit Checks for Employment Decisions”, which will ban the use of credit information for most employment decisions. The exceptions are for the cases when required by law or for a national security clearance.

To get you up to speed, there are only eleven states in the U.S. that restrict to run credit checks in one way or the other. If you apply for a job outside of California, Colorado, Hawaii, Delaware, Nevada, Illinois, Connecticut, Maryland, Vermont, Oregon, or Washington, get ready for a credit check. Also, the cities of Chicago, New York, and Philadelphia have passed laws that restrict credit checks by employers.

What Do Employers Look for in Credit Checks

Well, employers do credit checks for a lot of reasons. But one thing is certain if an employee has even a less than a stellar credit report, it’s not anything fatal alone. Yet, one big reason for asking you to submit to a credit check is to see if you can handle money responsibly.

According to “Discredited: How Employment Credit Checks Keep Out Qualified Workers Out of a Job” report, one in seven applicants with bad credit were rejected because of their credit history.

#1: A history of consistent late payments, indicating financial instability or irresponsibility;
#2: Whether you are able to manage money, especially if the company deals with financial assets or data;
#3: If you have excessive debt, it may reflect you’re desperate or have a lack of impulse control;
#4: If you have several delinquent credit accounts, it may signal you’re unorganized or don’t keep your word.

From one point of view, that might sound like the company is judging a book by its cover but think about it this way. The process of hiring a new employee is not cheap, so the company does want to mitigate their risks as much as possible. And remember that credit checks are not mandatory for all candidates.

Your Chances of Getting a Job with a Bad Credit

Even though credit checks tend to be common for most companies who work with money, bad credit report ‘is not anything fatal, per se’, the publication education director at Experian, Rod Griffin says. Information such as bankruptcy, credit balances or high-level debt may signal that you are in financial distress or even susceptible to bribery.

At the same time, your credit report is only one of the factors that might be considered when applying for a job. No one employer likes seeing bankruptcies, collections or large student debt. But life happens and a bad credit score doesn’t always mean the red flag.

As a result, most people with not less than stellar credit score are able to get a job but that’s not always an easy task. So, if you know that your credit score is not in tip-top shape, you’d better get ready for the rejection. By the way, bad credit score affects not only your job searching but also your dating.

Increase Your Chances of Getting a Job with a Bad Credit

Before you apply for a job, it makes sense to request a copy of your credit score. You need it to know what’s there and identify what you might want to work on. Say, if you have any correcting errors or catching up on late payments, be prepared with a good answer. Chances are you don’t want the adverse information to cost you your dream job.

#1 – Raise Your Credit Score
Once you know that your credit score is low, do your best to raise it if possible. Focus on paying all your bills on time. For many companies, late payments namely could be the biggest red flag that signs about your irresponsibility.

#2 – Prepare a Good Answer to the Employer
By all means, don’t lie or tell fantastic stories about how deep have you got lost in financial jungles. Your best answer is true. Keep your answer short and sincere, make sure an employer knows that it was a one-time problem and you do your best to changes things.
Even it was the hardest financial period in your life, try to give off a more positive vibe, explain what lessons you’ve learned.

#3 – Focus on Your Strengths
Remember that you turned down for a job because you want to get the required position in the company, not to solve your credit problems. That’s extremely important. As long as you talk about your bad credit, you are more likely not to hear much back, if anything.

So, it’s in your own interest to focus on your strengths and explain your goal and what you have to bring to the table.

Don’t Be Afraid to Apply for a Dream Job Even with a Bad Credit

Don’t allow your low credit to affect your confidence and efforts. It’s easy to feel alone in your pursuit, but we are not leaving in an ideal world. Your expertise, experience, and positive performance during an interview largely determine whether you’d stay in the game or not.

Your credit check is only one of the other factors that matter as long as you pay attention to it. Instead, focus on your job promotion and good things that happen, then chances are you’ll eventually reap positive results.

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