Looking for a new job? You may be required to submit your credit history before you are hired or promoted.
A recent survey shows 47 percent of companies conducted a credit check on at least some of its job candidates.
So how do human resource professionals decide who will need a credit check?
It wasn’t based on the candidate’s job history, experience or what part of town they lived in. Human resource professionals say they run credit checks based on the position.
Most likely to require credit checks:
If you want a job around money, you’re probably going to be checked.
Eighty-seven percent of human resource professionals surveyed review credit reports of candidates looking for work in banking, accounting and other jobs that require fiduciary and financial responsibilities.
Human resource’s top concern is to prevent theft and embezzlement, so it makes sense that they scrutinize people closest to the cash.
Want to make it to the C-suite? Human resource may want to see your long-term credit history.
Forty-two percent of those surveyed say they run checks on candidates for senior executive positions like CEO, CFO and COO.
They’re not just looking for recent mistakes. One-third of those credit checks go back more than 10 years.
The biggest red flag are debt collectors. Thirty-four percent of surveyed human resource professionals say they run credit checks on new hires in human resource or upper management.
These are positions that have access to highly confidential information like co-workers’ salary, benefits and medical records.
A current outstanding judgement on your credit report is enough to get you passed over 40 percent of the time.
It’s not just top managers. Twenty-five percent of human resource professionals also run credit reports on candidates who would have access to other people’s property or financial trust.
That includes cleaning crews, IT and administrative services.
Least likely to run credit checks:
You probably won’t be asked to submit a credit report if you are looking for work in heavy machinery, transportation, health care workers or those working with children or the elderly.
Fewer than 7 percent of human resource professionals surveyed check candidates for these positions.
Even jobs that require other background checks under state law are rarely checked for credit histories. Only 10 percent of human resource professionals said they run credit checks for jobs like a day care teacher or a licensed medical practitioner.
However, if you are seeking any of these positions with the federal government, there is a good chance you will be asked about your credit history. Some agencies, like the TSA, are very specific about what they will allow.
“Don’t let your shaky credit history
hold you back from getting the job.”
Avoid a credit check.
Choose a position that does not have primary responsibilities dealing with money, private information or other people’s property. Also, stick with smaller companies.
Only 25 percent of companies with 100 to 499 employees run credit checks, compared to 45 percent of companies with 2,500 to 24,999 employees.
Consider this: 74 percent of nonprofits say a favorable background check is the most important thing when deciding between finalists for a position. That compares to just 55 percent at for-profit companies.
No matter what job you are going for, the two biggest things human resource professionals care about when they are looking at your report are accounts in debt collection and outstanding court judgements.
Taking a proactive approach will help you.
1. Pay off debt collectors and settle outstanding court judgements before you apply for jobs. At least start the process so you can show employers you have a plan.
2. Companies have to tell you in advance if they want to run a credit check. Get one yourself for free so you know what to expect.
3. Most companies let you explain dings on your credit report. Be prepared to tell them briefly what happened, but spend more time explaining your plan to fix it.
4. Only 14 percent of companies believe your credit history is the most important factor when hiring you and 80 percent have hired people despite a bad credit report.
So remind employers about your experience, your skills and what they liked about you in the first place.
It’s not unusual for someone who has lost their job and their health insurance to go deep into debt just to survive. Employers understand this.
Don’t let your shaky credit history hold you back from getting the job that can turn your life around.
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