Did you know that bad credit can cost you the job you want? If you think banks and lenders are the only ones who look into a credit report, you’re mistaken. Even employers use an individual’s credit report to check for credibility and potential as a worker. If you have bad credit, an employer may refuse to hire you despite your impressive resume.
More Companies Check Credit
Aside from reviewing an individual’s credit history, employers also use credit reports to verify one’s personal background, identity and criminal history.
According to the 1997 survey conducted by the Society for Human Resource Management, around 35% of companies and employers review credit reports to determine which individuals have the potential to get hired or get promoted. Today, more companies are expected to screen potential employees using their personal credit information.
Why Be Concerned
Why are employers hesitant to hire people with bad credit? What does bad credit have to do with being a good worker? The fact is, the Federal Law prohibits employers from using bankruptcy as a reason to reject or fire a worker. Nevertheless, the law cannot really control an employer’s decision on whether to hire or not. If another applicant with a good credit report applies for the same position, who do you think would an employer choose to hire?
Obviously, poor remarks in your credit history can send a negative impression to a prospective employer. Thus, financial experts recommend checking your credit report first before applying for the job you want. If your report contains unauthorized charges or incorrect details, you can dispute these errors and have them corrected to improve your rating. On the other hand, if unpaid bills are the cause of your low credit score, you’ll need to find a way to settle those debts to ensure that bad credit won’t prevent you from getting hired.
Protect Your Credit and Keep Your Job
Consequently, job applicants are not the only ones who should be concerned. Even if you’re already hired, having bad credit may still cost you your current job. According to surveys, those with finance-related tasks (tellers, finance consultants, accountants, etc.) are the ones most likely to be evaluated, not only for their work performance, but based on their credit history as well.
As a worker, remember that the Fair Credit Reporting Act (FRCA) requires anyone- including employers to ask your permission first before running a credit check. Furthermore, your employer cannot use bankruptcy as a reason for not hiring you or firing you from the job. If your employer makes the mistake of citing this point, you have the right to take a stand. Seek help from a labor attorney to take legal action.
Still, you can avoid going through such trouble by maintaining good credit. Check your credit report at least twice a year to make sure that all information it contains are correct and accurate. Be aware about your payment schedules and pay all your creditors on time. More importantly, don’t take out credit unless you’re sure you can pay it back.