Can bad credit hurt your job hunt?
Debt and Finding a Job
TDS Reader Solutions
DIY Credit Repair Tips
Poor Credit and Checking Accounts
Credit Scores and Insurance Rates
Bad Credit Score and Employment
Is it true that it's hard to find a job when you have a charge off on your credit report? I'm having issues paying off my credit card, and as it looks, they're going to charge me off and they keep telling me that it will be hard for me to look for work if I have that on my record. Are they telling me the truth or just trying to scare me?
Credit Check for Job Depends on the Position
I perform the background checks for our company for the potential new hires. Our general rule of thumb is that if you will be dealing with finances, 401ks, etc. and you pop up with questionable debt, we will ask about it by calling you or having a meeting with you. If it is a really bad report, we will not hire the applicant and file an adverse action report. With an adverse action, it is your right to view the report we received (they send one to you automatically), and you can contest it if you disagree with any aspect of it. Basically, the financial jobs and some upper level HR jobs are the one where this will come into play.
Who Has Access?
The credit card company is attempting to frighten you and you're ready to believe them. Don't. (Note: Don't confuse a credit history with a background check. Background checks are standard procedure and use public information readily available to anyone. A credit history is not public information.)
According to CreditReport.com, the types of organizations that can access your credit report and perform a credit history check are any organizations with a legitimate business need that want to check your credit history. These organizations include:
- Insurance companies
- Landlords seeking a credit check for renters
- Credit card companies
- Companies where you are seeking employment (only with your written consent)
- Organizations considering your application for a government license or benefit (if the agency is required to consider your financial status)
- State or local child support enforcement agencies
- Government agencies (usually can only look at your name, address, former addresses, and current and former employers)
- Other organizations you've initiated business with
Your post raises the issue of why any employer would want to check your credit history. If you would be working in finance, banking, accounting, bookkeeping or involved with someone's money at all, that is a legitimate reason for them to ask for your permission. After all, if you can't handle your money, how can you be expected to handle other people's money?
Plus, they want to check for any potential issues that may trigger possible problems. For example, if you have massive debts, bankruptcies and a credit score that's tanked, and you are applying for a job in which the possibility exists to "borrow" the company's money to pay off your obligations, well, you can understand why the company would hesitate hiring you.
Are you one of the many people heading for debt trouble without knowing it? This simple checklist can help you find out and tell you how to avoid it.
If, on the other hand, you want work that has nothing to do with handling someone else's money, then your credit report, credit history and current financial obligations are none of their business. It is highly unlikely a potential employer will ask to check your credit history when the job has nothing to do with handling money.
Should this situation arise, tell them you'd be happy to let them examine your personal finances when they let you examine theirs. After all, you want to be sure they have the money to pay you.
Be Open and Honest About Your Credit Score
I can only speak for my own experience. I work for a company listed as one of the Fortune Magazine top 20 Best Companies to Work For. When I applied, I let them know right off I had charge offs and they said they appreciated my telling them up front. Honesty pays!
Credit Score a Barometer
They can actually use this information as a barometer. It shows the integrity of the individual in terms of monthly payments. Was the individual on time with payments? Has this person filed bankruptcy? How does it appear that this individual manages money? All of these questions can predict in some small way whether the individual would make a good employee.
My suggestion to you is to go to a credit counseling agency. They will help you with budgeting, debt repayment, etc. They may even suggest filing Chapter 13, or Wage Earners' Bankruptcy, where you can spread your payments out over a three- to five-year period.
Take the Next Step:
- Learn how to rebuild your credit score the right way.
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