Debt Management

3 Reasons Bad Credit Can Cost You A Job

One of the most discussed developments of recent years is allowing employers to essentially snoop on what once was considered sacred privacy.  Now in order to get hired, your personal credit score can be added in the vetting process, to judge applicants along with other standards.


Credit Widens Its Grasp On Consumers 

If it were not for bad credit, many people would just sail along in life oblivious to how important it is to get your financial life in order.  Many people are aware that their credit score, also known as FICO score, is important, when obtaining a loan.  Whether financing a car, furniture, or a mortgage to buy a house, your credit score is vitally important.  However, tying credit scores to employment can be devastating.

Imagine having just graduated from a top-notch college with a high GPA, ready for the world.  When you send your resume out showing you interned at a Wall Street firm, you expect job offers to come in by the boatloads.  Instead you get two stacks of rejection letters.  The explanation is your low credit score.  No doubt about it, you must contact a credit repair business immediately.  Your main question is why employers have the right to reject your application due to your low credit score. 


Credit Scores Are Linked To Trustworthiness

Like it or not, many companies equate whether you can be a trusted employee by your credit score.  In their estimation, if you do not have the discipline to pay your bills on time, you most likely will not work well on the job.  Unfortunately mitigating factors are not considered, nor are you given a chance to explain. 


Your Judgment With Use Of Credit Clouds It In Other Areas

Let’s say you apply for a bank teller position.  Based on your credit report they see you have problems managing your personal funds.  In turn, they will assume you will use poor judgment in handling hundreds of thousands of dollars if hired.  While this may represent an oversimplification of the facts, this is the logic you are dealing with.  Unless you find someone making hiring decisions and explain the special circumstances causing your low credit score, your job prospect is over. 


Financial Institutions Weigh Credit Heavily

When it comes to big banks, accounting companies, law firms and the like, they do not want to invest in someone with bad credit.  No matter the reason for your delinquencies, they do not want to chance it.  There are too many applicants with acceptable credit scores.  The HR departments of financial institutions tend to be very rigid about the characteristics they look for in filling positions.  If a person does not fit these cookie cutter characteristics, they will be shown the door.  They will not even offer you a chance to explain reasons your score took such a dip.  Bankruptcies and foreclosures, though very common in the recent recession, are also job killers. 


There has been a backlash in many states and several other states have pending legislation to block this practice.  At least eight states restrict the power of employers to check your credit report.  They are only allowed to perform a background check on applicants.    Many protest this is fundamentally unfair.  If applicants were unemployed and unable to pay credit obligations, they need a good job to begin paying again, which will boost their scores.  It is a Catch 22 for them.  Another problem is people neglect to check their credit reports periodically.  Some people denied employment found they were judged on errors, from the credit bureaus.  It is essential these problems be disputed to get them erased.  The last thing you need is incorrect information on your credit report stifling your chances at that great job.  

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