How Bad Credit Affects Your Career
A bad credit score not only makes it harder to get a loan, it can also hurt your chances of getting a job.
When you apply for a new position, employers might consider your credit score as part of their hiring decision.
If you have a bad credit score, you need to be aware of how this works so you can prepare for this extra challenge to your career.
1. Why employers look at your credit score.
Employers use your credit score as a measure of your character as a potential employee. If you have a bad score, it could be a sign you have trouble managing deadlines or are a bit careless.
Employers will also look to see if you have any large outstanding debts. If you are heavily in debt, employers may worry it would distract you from paying full attention to your job.
“Employers use your credit score as
a measure of your character.”
2. The type of job matters.
Your credit score will be more important for some types of jobs than others.
Employers hiring for a financial job, like payroll or accounting, would be more sensitive to a bad credit rating. Since these jobs involve managing money responsibly, a low credit score is a red flag.
Employers hiring for a position that deals with valuables like jewelry would also be concerned if you have a bad credit score because they might see it as an extra theft risk.
Lastly, if you’re applying for a job that would put you in position to learn company secrets, your credit score would be a concern.
Companies would worry you might be tempted to abuse your knowledge to get out of financial trouble.
3. Dealing with a bad credit score.
Before applying for a job, contact the credit agencies for a copy of your credit score. You should know where you stand to prepare for your interview.
At this time, double check your report for any mistakes that are incorrectly dragging down your score.
For example, there could be an old debt that should have been removed on your report. If there is a mistake, contact the rating agencies and ask them to remove it immediately.
For a potential employer to check your credit score, you need to give them written permission first. This means you’ll know in advance whether this will be a problem.
If an employer asks to check your credit, take that chance to explain yourself.
Let them know where you stand and what your plan is for addressing the issue. This gives you a chance to frame the situation in a more positive light.
Your credit score could still end up being a problem, but you’ll be in much better shape than if you had just waited for the interviewers to discover the problem by themselves.
Bad credit can affect nearly every aspect of your life, including your career. Use this as just one more motivation to maintain good credit habits.
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