Can Bad Credit Cost You Your Job?

Did you know that having a bad credit history could cost you your job? An increasing number of American employers have turned to running credit checks to screen job

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applicants. Some companies even evaluate existing employees on a regular basis by checking their credit reports. If you have outstanding debts, you might consider getting one of those  credit cards for bad credit to clean up your report before you apply for your dream job.

Not all companies run your credit history when you apply for a position. However, if you’re applying for a job that entails working with money or valuables, it’s a safe bet that they’ll be checking your credit history. Financial institutions, brokerage companies and jewelry manufacturers all run credit checks, as do hotels, accounting firms, human resource departments and government agencies.

Companies run credit checks because they want to hire employees who won’t be tempted to embezzle company funds to pay off large debts. Some companies fear that employees who carry large debt loads are susceptible to blackmail or bribery. The federal government carries this concern even further, indicating that citizens who owe large debts are considered national security risks.

Many companies feel that your credit report gives them a sneak peak at your true character. Having a good credit history indicates that you are a responsible person with excellent character. Having a bad credit history means that you are an unreliable person of poor character. True or not and fairly or not, this is the current belief running throughout company hiring departments.

Unfortunately, you can’t relax about your credit report even after you’ve been hired for a position. Once you’ve given a company written permission to check your credit report, they can recheck it at a later date. Government and financial organizations often run periodic credit checks on all of their employees. Some companies only recheck your credit history if you are up for a promotion. It’s a good idea, therefore, to keep your credit history squeaky clean.

Keep in mind that having a couple of late payments probably won’t kill your chances of employment or promotion. Most employers look for the really big issues, such as high credit card balances, defaulted student loans, repossessions and foreclosures. Some companies also look for charge-offs and consistent late payments as well.

Steps You Can Take

Financial experts suggest checking your credit report before you start your job search. Read your credit report carefully and make sure that all of the information is accurate. If your report contains incorrect details or any unauthorized charges, dispute these errors immediately and have them corrected to raise your credit score.

If you have a host of unpaid bills, find a way to settle those debts to improve your credit history before applying for jobs. Many people turn to credit cards for bad credit consumers. These cards allow you to consolidate all of your debts into a single debt. Just don’t forget to make the payments on this card.

Be upfront with potential employers about any negative marks on your credit history. Just tell them that you have had past issues with your credit and are now working to clear up all of your debt. There’s no need to go into explicit detail.

Once you have a job, be sure that you check your credit report at least every six months to ensure it contains only correct information. Pay all of your creditors on time. Never take out any new lines of credit unless you are absolutely positive that you can pay it back in a timely manner.

 Post by Moneysupermarket

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  • 7 comments

    Comments

    1. I’ve always worked finance jobs that check credit history, so I wasn’t surprised at this trend. However, new potential bank employees can be surprised to learn they didn’t make the cut because of credit!

    2. The military also checks credit history when you apply for a security clearance. Having poor credit can keep you from receiving a clearance which can keep you from many jobs past the entry level.

    3. It is surprising how many people don’t know that a bad credit rating can cost them a job. The same is true for all aspects of their public life lived out in social media. But with the credit score, you’re talking about a person’s potential for mishandling of money (when the job entails that).

    4. Well, since the unemployment rate is at an all time high I would imagine this would be an optimal way to weed out the the “weaker link.” Just be responsible with your money and you won’t have to fret! Great article.

    5. Well, since the unemployment rate is at an all time high I would imagine this would be an optimal way to weed out the the “weaker link.” Just be responsible with your money and you won’t have to fret! Great article.

    6. Well, since the unemployment rate is at an all time high I would imagine this would be an optimal way to weed out the the “weaker link.” Just be responsible with your money and you won’t have to fret! Great article.

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