Credit and Employment: Part I

By now you probably know that your personal credit history affects your ability to obtain credit. Being approved for credit when you're looking to purchase a new home, car, or even something as little as furniture and household items are all contingent upon your credit history. What you may not know is that a low credit score can also impact your ability to obtain the job you want.

If you are anything like most people, your credit rating is probably the furthest thing from your mind when you’re looking for a new job. You are probably spending your time tweaking your resume and cover letter. You may even be checking your wardrobe for those key power pieces. However, your credit score should definitely be on your mind if you are serious about getting hired. 

If you think it’s a bit unfair to have your professional ability judged by your credit history, you’re not alone. However, the reality is that most employers do some type of background check on their prospects before extending an offer of employment. Depending on your industry, your credit may be more heavily scrutinized. If you are applying for a job in the finance, for example, or another field requiring a high level of confidential access, a poor credit score is an immediate red flag to a potential employer. Even if you’re not pursuing a position that fits these specific criteria, an employer may perform a credit check as part of their normal hiring procedure.

Realistically, your credit score can play a very real role in whether or not you obtain your dream job. This is especially true if the job in question works with money, such as in a bank, or in another finance related field, working with jewelry, or other high-end merchandise. It is standard industry practice for applicants for these types of jobs to have their credit checked along with a background check. When you are completing your application, you may not realize that you are consenting to a credit check, unless you read the fine print carefully. According to federal law, individuals in the pre-employment process must give their prospective employer permission for not only a background check, but a credit check as well.

This type of heavy scrutiny may sway some applicants to believe potential employers are looking for faults with applicants, but this is not necessarily so. Most often, if you have been asked to consent to a credit and background check the potential employer is highly interested in you and would like to move forward with the hiring process. Company policy and procedures require most companies to follow similar protocol for hiring selected candidates. This typically includes a credit and background check, verifying education, checking references, and in some cases even drug testing and criminal history. This step in the hiring process is not personal and ultimately protects the business and it’s clients from potential threats.

Remember: You must give consent, under Federal law, for a prospective employer to perform a credit check. Be sure that you know and understand exactly what you are signing during the application process. 

The time to be proactive with the care and repair of your credit score is before you begin your job search. You are entitled to one free credit report per year from each of the major three credit bureaus (Experian, EquiFax and TransUnion). Take advantage of this opportunity to carefully review each item listed on your report. You may be surprised at some of the items you find. The good news is that you are protected by laws under the Fair Credit Reporting Act that prohibit a credit bureau from keeping erroneous negative items on your credit report. You also have the right to question negative items. Click the “Request Consultation” button above and we will help you work to get them removed. 

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