Poor Credit: A Potential Roadblock for Job Seekers

—What you can do now to avoid jeopardizing your future

As if searching for a job weren’t hard enough, we have one more oft-overlooked consideration: our credit. Up to half of employers screen out potential candidates with problem credit histories.* Yet, based on a survey of 1,000 adults, 80 percent of Americans don't know that credit history can be used in pre-employment screening.

Trouble with credit raises a red-flag for hiring managers. Some, believe these candidates may be at greater risk for theft from the company or bribery from outside sources. Others see financial problems as an indication of a lack of responsibility, inadequate judgment or questionable character. Regardless of the reasons, job hunters are best served by dealing with the reality.

See where you stand
Obtain copies of your credit reports prior to looking for work. You may do so for free, once a year, at www.annualcreditreport.com. Track your progress by running new reports every several months. Employers are most concerned about serious negative marks—foreclosure, eviction, huge debt loads and collections.

Look for inaccuracies on your credit reports and dispute them.
Accurate, but damaging information—late payments, charge-offs, foreclosures, judgments, inquiries, repossession records, tax liens and collection records—will expire from your credit report after 7 years. Chapter 7 bankruptcies records remain on your reports for 10 years, Chapter 13 bankruptcies for 7 years. If the remarks are still on your reports after these periods, you may write the credit bureaus and request that that outdated, negative information be removed.

If the credit bureaus reject your inquiries, you can submit a 100-word “Consumer Statement” accounting for your situation—why you got in debt and what you’re doing to improve the situation. Employers who pull your credit reports will see this explanation and some will take it into account when making hiring decisions.

Try applying for a different type of job.
When it comes to credit history—specifically the amount of debt you carry and the types of negative remarks you have—some companies will have firm standards which will work against you. If your credit is weak and you apply for jobs related to cash—as a salesperson, cashier, payroll manager, financial planner or senior financial executive—you may have less luck than those who seek a position as a graphic designer, writer or plumber.

Improve your credit.
Despite past mistakes or unfortunate circumstances, improving your credit is within your control. You can do so for free or the cost of postage at most, but there is no legitimate way to do so quickly. Don’t fall for guarantees of “credit repair.” These scams cost hundreds of dollars and, most often, the rip-off artists dispute negative notations which makes the items disappear temporarily. However, they will pop back on to your reports within the month if the disputes are not resolved in your favor.

Your best bet is to take personal responsibility for improving your credit. And the most important thing you can do is to pay your bills on time. Reducing total debt and keeping it low are also essential. ClearPoint offers tips on how to better your credit. By following these guidelines, you could see improvements in several months.

Get help if you need it.
Hundreds of thousands of people have problem credit histories. Many seek assistance from consumer credit counselors, such as those at ClearPoint Credit Counseling Solutions. The nonprofit organization specializes in debt repayment and credit recovery. Call (877) 877-1995 to make a no-cost appointment.

With awareness of how your credit can affect your job search, along with motivation to do something about it, you can prevent bad credit from costing you a job.