How Poor Credit History Can Damage Your Career

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Many job seekers are shocked to learn that poor credit history can damage their career.  They generally find out when they are not offered the job due to poor credit, despite high professional qualifications.  The Fair Credit Reporting Act authorizes employers to obtain information from consumer reporting agencies with written permission.  Although this is one of the many factors when selecting a candidate, employers judge a candidate with bad credit as irresponsible or lacking integrity.  Avoiding candidates with credit issues also reduces the company’s overall risk of employee theft and negligence.

According to the SHRM (Society for Human Resource Management) survey, among organizations that initiate credit background checks, 58% perform a credit check after making a contingent job offer. 34% conduct credit checks on select job candidates, such as financial positions, executive positions, and positions handing confidential data. SHRM also reports that employers look for outstanding judgments, accounts in debt collection, bankruptcies, a high debt-to-income ratio, foreclosures, and tax liens.

Positive Steps 

• Review your credit report.  You are entitled to one free credit report each year.  Click here to gain more information from the Federal Trade Commission. 

• Identify errors and take prompt proper action to correct them.  Follow this link for suggestions from the Federal Trade Commission on correcting issues. 

• If you have a low credit rating, inform your potential employer when you realize you are a finalist for a job opportunity. Explain the reason for your poor credit, such as an unexpected medical emergency. You want to explain it before the employer reviews your credit reports and opts for another finalist over you due to your poor credit rating. 

• Create a personal financial recovery plan.  If you can’t devise a plan to pay down your debt and establish savings on your own, you may need a counselor.  There are many organizations that border on the unethical and some are scam artists.  There are counselors available at no cost to you.  Research the organization with the Better Business Bureau and only work with one with a good rating.  Also, investigate the firm with the Federal Trade Commission.  

The job market is challenging enough, don’t let bad credit get in the way of a good opportunity. Take control of your finances.  Delaying action will only make things more difficult. You can and should serve as your own advocate. To ensure that you develop and maintain a brand that exemplifies your professional abilities, make sure that you are aware of your potential issues and take steps to remediate problems before they hinder your job prospects.