You may have everything that a potential employer would want from a job candidate. The right education, a lot of experience in the field and a good personality that people would be happy working alongside.
You should be a shoe in for the job. Until they check your credit.
If you have bad credit then your dream job could actually be just out of reach. It may not seem fair, but some companies use your credit score to get the whole picture of a candidate. And if yours is not good, then you may be passed over by a competitor for the same position.
It seems like a cruel twist of fate that you need the job to improve your finances and raise your credit rating, but it is your credit that keeps it from happening. This is one of the many reasons your mental health can also be affected by bad credit.
Why does a company check credit?
It may not seem fair to you that a company will judge your ability to do the job based on your credit score.
There are several reasons an employer would want to know if your credit is good, however.
Lots of late payments – This can indicate to an potential employer that you are not very organized at best. At worst, you may seem like the type that is not bothered by the fact that you don’t live up to things you’ve agreed upon. Either way they see it, you don’t look like the right person for the job when they see this.
Too much debt – When a person has racked up a lot of debt that looks unsustainable, then it may raise a red flag when it comes to potential theft. People in desperate situations tend to make bad decisions. And paying off debts can lead to somebody stealing or skimming profits to be able to pay back. Though you would never actually do this, it is not something a company will want to take a chance on.
Mishandling of finances – Lastly, if an employer sees bad decisions when it comes to taking on credit, then they may wonder how good you are at handling financial decisions for the company. If you can’t make good financial decisions for yourself then it doesn’t seem like you would be able to make good decisions for the company.
If a company needs you to have a security clearance to work there then your bad credit will surely hinder your chances. You’ll need to be able to repair your credit before applying to a company that requires it.
Going with a credit repair company like Ascension Credit Services is your only hope to be able to get hired for that job, but it will take time before you can qualify.
What are your rights?
A company can’t check your credit without you knowing about it. When it comes to your credit, you do have rights no matter how bad your rating might be.
The Fair Credit Reporting Act is a law that requires a company to make a clear notice that they intend to check your credit. And they can only check it with your express written permission to do so.
Now, if you deny them permission, you are unlikely to get the job so your chances are better at being hired when you do give them permission even with bad credit.
Then, if they do reject you based at least partly on your credit rating, then have to inform you that this factored into the decision making process. They’ll even need to give you a copy of their report.
Does an employer credit check further hurt your score?
Even people with good credit sometimes feel funny about giving permission to view their credit. It is thought that too many inquiries can actually damage your rating.
The reality is there are different types of inquiries and not all of them affect your credit score negatively. When a company uses your credit rating for employment reasons, it is called a soft inquiry and doesn’t have any effect on your score.
These inquiries don’t show up on a credit report, either so employers can’t see if any other companies searched your credit score for hiring purposes.
Your credit, whether good or bad, has a ripple effect that travels throughout every aspect of your life. It can ruin job prospects and even relationships when it is bad. You can improve your credit score yourself by making timely repayments on a bad credit loan, or by using a credit builder card. Don’t wait to long to repair your credit. Otherwise it becomes harder to fix the longer you wait.