Many employers, and certainly the larger ones, use a prospective employee’s credit history as a pre-employment screening methodology to judge their character and credibility. The reasoning is that your inability to handle your financial commitments may be a sign of personal irresponsibility, which may spill over into the workplace. For example, if your monthly debt expenses are significantly higher than your take home salary, an employers may be concerned that the adverse personal finance situation may distract you from your job performance.
Critics of using a person’s credit history as a job pre-screen are of the view that professional qualifications and experience should not be mixed up with a person’s credit history as a judgment of their job suitability. They believe that there is a very tenuous relation between bad credit and job performance. It’s a situation they have got themselves into due to poor or unfortunate financial decisions and need a job to pay down their debt and build back their credit score. Creating a no win situation where people require jobs but they can’t get one because of their bad debt creates a vicious spiral that leads towards growing numbers of long term unemployed and indebted which is a major strain on an already depressed economy and job market.
Employer groups however argue that a credit check is only one part of a comprehensive background check that is part of diligent employment strategy. So whether it is about verifying your credit or criminal history, a drug test or your education employers want to make sure that everything is place before they make the final offer. This is a prudent approach for the company and other employees, particularly if you are in a position of authority with access to sensitive data, cash and other valuable items.
Still, more than 80% of Americans are not aware that the credit history can be used for pre-employment screening purposes. So make sure that each time you sign an employment application you have read the fine print thoroughly. If you are not comfortable with this you can ask the employer about their policies right at the outset. On most occasions when you sign an employment contract there is likely to be a clause that you have granted the company and its third party vendors the right to perform background checks on you. But don’t lose heart if you have a bad credit history. It doesn’t necessarily mean that you are not ever going to get a job – particularly if you can provide a plausible reason for your poor credit.
Should you tell employers about your poor credit history or financial hardship at the outset? No – unless the job description specifically requests a good credit history. During your job search and early interview process there is no need to discuss your credit history. Why knock yourself out of the race prematurely? When they have firmly conveyed that they want you as an employee, you can make queries about their background check policies. This also gives you the opportunity to provide an explanation and justification for your credit and discuss steps you are taking to restore your financial credibility. If an employer really wants you they will be willing to overlook a poor credit score for the prospect of a strong performer.
6 thoughts on “Can a Bad Credit Score Make It Hard To Get or Keep a Job?”
I have such a low credit score and it’s mainly due to my student loans. I can’t repay them because I have no job. I have no job because of the jerks who feel that my low credit score is due to my inability to handle my personal finances and therefore do not hire me. I honestly believe that this is intentionally done. I am swamped with mail every month and FAFSA doesn’t understand why I cannot repay my loans. I have to constantly repeat myself to these people explaining that I do not have a job. So they tell me well maybe you should look for work. Do me a favor all of you who judge me because of my low credit score…go jump in front of a speeding train.
What a joke.How my credit score is has no bearing on my job performance.This country is getting more nuts every day.We need to start a class action lawsuit against whoever’s responsible for this crap.
Good credit can indicate a level of responsibility that’s desirable in employees. It can also give employers an idea of whether they can trust an employee around money. If you have bad credit today, it just means you’re living in this decade. While employers are legally allowed to perform credit checks under the Fair Credit Reporting Act, they can’t do so without your permission. They have to inform you that someone is going to be conducting a credit check, and they have to get your permission in writing
Companies seem to be checking credit reports more as they feel this is more reliable then checking references
While credit might not be the most important factor in a hiring decision, bad credit can be a tipping point between one candidate and others competing for the job
Employers tend to judge people on particularly silly premises. Often when I go for an interview, I often feel like I’m being tested for my obedience to take scooby snacks rather than my actual work ethic and value offered to the company. Which is why I’ve had most of my work in general labor retrospectively. None of the nonsense. We just want to work. Bad enough we get judged for how we look. And now the credit score? Ah… I could never accustom myself to doing tricks.
It usually never crossed my mind though that a credit rating could be used against you. I suppose I can keep that in mind the next time around…