What to Do if Your Poor Credit Threatens Your Job Prospects

Friday, 15. April 2011


One of the consequences of the recent recession has been that layoffs have led to difficulties some have regarding paying bills. Other problems can arise for job hunters when bankruptcy, medical bills, out-of-control credit card debt and other unforeseen problems result in a less than desirable credit history. Unfortunately, employers can request a credit history from you. Refuse, and employers can refuse to hire you, thinking you have something to hide. Agree, and employers can refuse to hire you based on your poor credit history.

Be Prepared: Do You Know What’s in Your Credit Report?

An employment credit report won’t include your credit score, but it will include other information about your past habits and financial behaviors, including late payments, whether you have a large amount of debt and bankruptcies. Some hiring managers worry that evidence of financial problems can lead to problems in the workplace. What if your debts lead you to steal from the company? What if your apparent lack of financial responsibility is a character trait that translates into lack of responsibility on the job? Employers check your credit history, and that could cost you a job.

Before you begin the job hunt, it is a good idea to double-check your credit history. You are entitled to a free credit report from each of the major credit bureaus every year by visiting www.annualcreditreport.com. (You are also entitled to see your credit report if the information it contains results in your not being hired.) Know what is in the report, and be able to account for why the negative item is present. If you missed one payment three years ago, point out that it was an oversight, that obviously only happened one time.

A pattern of problems, though, might require a little more explanation. You can have a statement prepared so that you can address these concerns. If you are asked in an interview to provide permission for an employment credit check, and you know there is something in your credit report that can be damaging, be up front about it, and explain the circumstances – and how you have since remedied the situation. You want to prove that you are more responsible now, and that you are working to improve your financial situation.

Including a Statement in Your Credit Report

You are also allowed to make a statement in your credit report. If there are extenuating circumstances that have resulted in your poor credit history, you have a chance to include an explanation. Your statement will be included with your credit report, and potential employers will have the opportunity to read your side of the story before making judgment. Make sure that your statement is professional, grammatically correct, and as free from errors as possible. Keep to the essentials, and try to make your statement as brief as possible while covering the major points.

Also, since you can find out exactly which items contributed to your being passed over for a job, it is possible for you to address them with the employer. Some hiring managers will give you a chance to explain negative items on your credit report, and address concerns. Be ready with an articulate defense, and you might be able to save your job chances.

Janet Hutchins writes for Credit Cards Canada, a site devoted to helping consumers learn about credit, and find the best Canadian credit cards.

This post was included in the Carnival of Wealth and the Integrated Finance Carnival #5.

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