Good Job Seeker, Bad Credit. Are You Screwed?
February 04, 2009 (1:00PM) by Julie O'Malley, CPRW
"I can't get a job because I have bad credit, and I can't improve my credit because I can't get a job!"
It feels like a classic Catch-22. Fortunately, the reality is not quite that harsh. In most cases, an imperfect credit record will not automatically prevent you from getting the job or promotion you want. Here are answers to some typical questions regarding the good job seeker-bad credit conundrum:
 Is it Legal for an Employer to Check Your Credit?
- Yes, but they have to inform you and get your signed permission if they're hiring an outside screener. (But no permission is required if they're doing their own fact-checking.)
Why Do Employers Check Your Credit?
- They presume a person with money troubles will be more inclined to steal in a job that involves direct access to cash or valuables.
- For people working in financial industries (banking, accounting, investments, etc.), having a track record of fiscal irresponsibility calls into question their financial expertise and suitability for the job.
- Government or other sensitive jobs often mandate full background checks (including credit reports) for security reasons. An employee who’s deeply in debt is more likely (statistically speaking) to accept bribes, sell secrets, or take part in other illegal income-generating schemes.
- Credit checking can sometimes be another way to verify facts, dates, and numbers on your resume (e.g., discrepancies between education dates and student loan dates).
If Your Credit's Not Perfect, Should You Bother to Apply?
- First, it's important to realize that only about 35% of companies actually pull credit reports on current and prospective employees. In other words, almost two-thirds don't.
- If you have "ordinary" glitches in your history, such as a late credit card payment or two, it's not likely to be a deal breaker.
- If you've defaulted on loans, faced repossessions or foreclosures, bounced a lot of checks, and have collection agencies hounding you, your employment choices will be more limited.
- In general, you have a clean slate once all your credit troubles are at least seven years in the past. Paid tax liens, accounts placed for collection, and any other negative information (except criminal convictions) are removed from the report after seven years.
What Can You Do About It?
- First, get a free copy of your credit reports, so you know what employers are going to find. Contact the reporting agency and get any errors fixed, pronto!
- Then, do some research of your own about how to fix bad credit — and beware of scams, because plenty of shady people are out to prey on you when you're desperate.
- If your credit problems are the result of factors beyond your control (such as medical bills) be up-front about it with prospective employers (but ONLY when you're being offered a job and it’s probable they're going to check your credit).
- And if your problems are caused by, ahem, living beyond your means, check out this surefire advice from SNL: Don't Buy Stuff You Can't Afford. Ouch!
For full information on this topic, including the legal intricacies of the Fair Credit Reporting Act (FCRA), visit the Federal Trade Commission web site.
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These are great information that can help many not be confused with the policies in their respective work. Not trying to repair your credit can have more far reaching consequences than one might think. Believe it or not, a lot of employers will make credit checks when you apply for employment. What you do outside of work should have nothing whatsoever to do with work, but that would make sense. (Which isn't allowed, just ask Congress.) A late payment is something you want to avoid, even if it means a no fax cash advance to help out.
Making an effort yourself for credit repair and controlling your expenses seem to be a good idea. Such credit checks are on the rise. About 35% of companies pull the credit reports of current or potential employees.
Re: Good Job Seeker, Bad Cretit First of all ALL employers check credit. It has to do with the Fair Credit Reporting Act. (it used to apply to only credit cards and general purchases...but 10 years ago it spread to the employment arena). And, down here in Florida, employers don't obey the law. If you've got bad credit, they don't tell you the address and name of the Credit Reporting Agency, as the law requires. I'm not sure how they're getting away with this, but they are. And, with that said, I'm in that category. I can't find work due to bad credit.
Discrimination against a creditworthy individual isn't legal, but it happens, and it's tough to pursue and prove. On the other hand, "screening" is perfectly legal and is applicable to finance-oriented positions.
As I was once an owner of a company that had cash flow problems, the business affected my personal credit. I was turned down for a contract position because it involved tracking financial transactions. I was never even considered for an interview even though my credentials were perfect for the position. Stuff happens.
Don't volunteer it, but hiding it has worse consequences. There are other jobs and you have to move on.
By all means, try to avoid a bad credit rating. If you can't, it's not the end of the world. You just have to keep looking.
I am another individual that falls in this category. I can not get a job because of bad credit. I have twelve years of banking experience. I had a life changing event, Divorce, which caused my mortgage to go into foreclosure. I supported the mortgage for two years, but could not continue after exhausting all of my resources. The FCRA is truly an invasion of privacy, and has absolutely nothing to do with my morals,work ethics, or the abililty to do my job.
Same problem here. Cant get a job due to catch -22 of bad credit as a result of job loss in the Great Depression II and Bush & Co not acknowledging the recession in 2007 to begin with.
Screw all the recruiters/companies who do this and the horse you rode in on.
It's called employee profiling. It's like generalizing all people as bad. This is bad for the economy, some people who end up with bad credits are victims of banks, financial institution and brokens and other money related businesses and they are the ones that check your credit background. Then, they will entice you with another credit cards with 30 percent or over. What's with that?
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