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Bad Credit Hurts Job Hunting Opportunities

By Edited Nov 13, 2013 1 1

Your credit score seems to follow you everywhere you go. Whether you are searching for a car loan, a mortgage, insurance and now even a job, it counts whether it is good or bad. Bad credit scores hurt lots of job hunters without their knowledge. When the recession hit these unemployed workers looking for jobs did not know this was part of the reason no offers where being thrown their way.

The Good and Bad of It

Imagine working for a company or in a place for a several years. Generally when layoffs or downsizing comes your way you do not worry as much if you have experience, ability and education in your back pocket. These are all bonuses for finding a job. With these things in hand your next place of employment shouldn’t be a problem. Nevertheless, when you send out these great resumes and do not receive any feedback and cannot seem to find an issue or problem that makes sense, look at your credit score. Owing debts and broken agreements in your history will count in the bad category when looking for your next paycheck and put you on a do not hire list. This situation exists most times without the interviewers knowledge.

Why does this hurt me?

When you owe money out or have a sketchy history of paying back what you owe these are things which affect whether a business would like you as an employee.

There are times when things are simply out of your hands. Lots of people find themselves in between jobs or out one and discover the difficulty in finding ways to meet financial obligations you took for granted before. There are times when everyone cannot be paid on time with a smaller or missing income and you must make sacrifices.

When making a choice  between paying a doctor's bill on time and buying groceries for the week, groceries will win out. Though, this means your financial rating will suffer until things are back to normal or more money is coming in to cover all the monetary commitments you have.

What are they looking at?

Credit cards, mortgages and even doctor bills all count toward this and do not show you had a three-month period of unemployment making these responsibilities difficult to meet. It is a catch 22 situation. The circle goes round and round.

You are broke without a job which keeps you from paying the debts you owe. Not taking care of these means broken payment promises and a bad feedback on these kinds of statements . Employers will not hire you because of a bad one, but if you had the money from working you could pay your bills to fix it. If you fix it your chances of a place within the company looks great.

More companies are jumping on board

A high profiled nonprofit advocacy group called Demos admits nearly half of all employers look at an applicant’s finances as part of the overall hiring process. This makes it difficult to even get a better place with a company for many people who would like to take better care of their debts.

For an example, there is a situation where you were without health insurance and have a high medical bill obligation. In order to remedy the situation you need a better income which means better employment prospects. Though, when you apply and your debt responsibilities look bad , there is no opportunity to get a better one. This blocks the road for someone willing to make a better financial outlook with bills that are no fault of their own or out of their control to get off of the crazy cycle.

Errors are found for a lot of people on their personal form for these obligations and need correcting. Yet, they are unaware of these and simply are continually passed over for better employment prospects without knowing why. It is a good idea to check yours for any errors and fix them as quickly as possible if you are in the job market.

What is being done to help

There are some consumer advocacy groups attempting to break the tie between companies or businesses who look at these as part of the screening process for hiring. The movement originally started in New York City, but has spread across the nation.

Currently eight states restrict the way companies use one in the hiring process. These states include Hawaii, California, Connecticut, Washington, Oregon, Vermont and Maryland. Several other states are in the course of changing current legislation related to the matter. States such as Colorado, Massachusetts and New York are all reviewing laws on the books in this area to limit how they are used.

This doesn’t always mean a pristine one will land you the work all by itself. This is not always the only hindrance used in booting you back to the unemployment line. There are also other factors such as experience, skills or education as well. Though, if everything appears in order, look at this for a reason you are not receiving the call backs or attention you feel your application deserves.

The issue of where your credit lies is extremely important for millions of Americans. This is especially true since the recession during the years of  2007-2009. Millions were hit hard in this area with foreclosures, bankruptcies, missed payments and late payments. Although they are desperately trying to recover, without a way to get an income flowing they are unable to.

Why are employers looking at these?

There are some situations where the denials and a less than perfect financial history doesn’t appear to correlate. In other words, selling handbags and having a foreclosure in your past doesn’t even touch one another. In spite of this,  the work or resource to make a living  based on this information is denied. This is one of the justifications used for changing current legislation that lets them use this in a screening process.

Several employers have advised they look at this information to decide the character of a future employee. However, one thing may have nothing to do with the other. Applicants do not get the opportunity to explain the situation behind the missed payments, bankruptcy or other blemishes. Therefore, are they really finding out anything about the person's character from something on a piece of paper from a third-party?

There are fifty percent of businesses looking at these before they hire while the other fifty percent are not. Are half of companies looking at these really not giving the work because of a bad one or are they simply looking for a reason to say no to certain candidates. Is this getting around the no work based on race, religion, color, sex, age or other illegal reason outlined in our constitution?

In conclusion                                                   

The Fair Credit Reporting Act does say an employer must tell a candidate they are going to pull their credit report (this also puts a ding in your standing) for job reviewing. This will give you a heads up if you have a terrible one. Everyone is entitled to one free one each year, make certain you check for errors and get any fixed as soon as possible.

If you know you have a bad one and the business you want to interview with does pull these before offering a place with the company, look elsewhere for work. Some will give you the opportunity to explain blemishes on the report. Hopefully more states will change legislation to help anyone in this horrible situation sooner than later. Meanwhile, remember your credit does play a part in this very important aspect of your life and financial future.

how good or bad your credit rating is will count toward a job interview with 50% of employers

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Comments

Apr 10, 2013 10:48pm
JHKersey
Excellent article on how your credit can have an impact on not only your ability to purchase things making periodic payments, but even have an impact on your ability to get a job.
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