How Bad Credit Affects Your Job Search

Building good credit can be as difficult as having bad credit. The rules and regulations are complex and the resources may be intimidating. Many people feel like they could drown in their debt and the added stress of Job Search intensifies these feelings.

Nativehire wants you to know that there are resources, you do have rights, and awareness will bring you one step closer to employment. Please, use the resources below to help you bring balance and meet your employment goals.

What Should I know about my Credit Report?

The most important thing about your credit report is knowing what is on it before the employer does.

People can access a free copy of their credit report at Annualcreditreport.com. Go over each item and review the negative marks on your report. The negative reports can range from an overdue library fine to a bankruptcy. Another factor is the number of hard inquiries listed. Hard inquiries show you’re actively looking for credit and the more hard inquiries the more they negatively impact your credit. Soft inquiries, run for promotional offers and by lenders reviewing your credit, do not affect your score. Pulling your own credit report does not reflect negatively.

Additional factors, such as payment history, debt-to-income ratios, length of credit history, new credit, and types of credit used, affect your credit score. If you believe information has been listed incorrectly, you have the right to dispute or challenge any inaccurate or incomplete information.Check out the resources below for more information.

Why do Employers care about my Credit History?

Employers review your credit report for many reasons. A SHRM study showed the #1 reason was to reduce theft, followed by reduced liability for negligent hiring and for assessing trustworthiness. Employers are concerned about the applicant’s decision-making skills and level of responsibility.

Casinos, banks, and companies with high security levels are understandably concerned with an employee’s susceptibility to bribes, unethical behavior, or selling confidential information to competitors or outside agencies to offset their debt. However, even companies that work on smaller scales may background check and include reviewing your credit. They want to how reliable and consistent the applicant has been with their finances.

What are my rights?

Employers cannot pull your credit report without your permission. If you are concerned about how your credit will affect the process, have an honest conversation about with them before giving permission for the report to be run. Highlight your skills, lessons learned, or what has changed since the negative marks were made. If you do not get the job, the Federal Trade Commission requires employers to notify you if it was your credit that adversely affected your application. Employers are also required to give you a copy of the report.

Websites:
Annual Free Credit Report
Your Rights (Federal Trade Commission)
Article – How to Increase Your Credit Score (SBA)
Article – How Credit Scores Affect (Federal Trade Commission)
FAQs – Credit Report (Federal Trade Commission)
Article – #7 Myths Debunked (Experian)
Article – Bad Credit Cost Me a Job (CNN Money)
Article – What’s in My FICO Score
Article – Understanding Your FICO
Resource – Family Credit Management
Resource – Credit Karma
Resource – Credit Sesame
Resource – Stop.Think.Save
Resource – DebtReliefCenter.org

Job Search Basics