Can Bad Credit Cost You a Job?

March 26, 2008 By Tisha Kulak

As companies become more diligent in recruitment and hiring practices, there is a strong possibility that the job you are applying for will require a credit check. Why has this become a common practice? Well, it may not be common for all positions but the potential is strong if you are applying for a position in finance, human resources, bookkeeping, accounting, as a direct money handler, or for any other position that deals with other people’s money. The main concern over issues with bad credit is your overall ability to handle money. In theory, if you can not manage your finances very well, how can you do it for others?There is also a need to ensure there are no red flags that may leave open the potential for using company money to pay off large amounts of debts. The company is interested in protecting themselves from any dangers of that kind and if something should be found, the hiring authority may bring the subject to the table before proceeding with the hiring process. Your credit report may also indirectly give the employer a peek into your reliability and responsibility when dealing with personal matters and may help ascertain whether you’d make a good employee.

If you are applying for such a position and anticipate a credit check as part of the application process, the best you can do is be up front about marks on your credit, including consistently late payments or charge-offs. Let them know that you acknowledge you have had issues with your credit and that you are working to clear them up. You do not have to go into explicit detail about your circumstances. Many employers would appreciate your honesty.

In the event you are applying for a position that does not deal with money, a credit check is inappropriate, as is any information about credit or financial obligations. Also, keep in mind that a credit check is very different from a background check. A background check is a standard procedure. Information that is already available to the public is used for this purpose but a credit check is not part of public record. Companies must also have a written consent from you to initiate a credit check.

Beyond potential employers, the only other people who can have access to your credit history and information for checking purposes include:

• Banks
• Insurance Agencies
• Credit Card Companies
• Governmental agencies reviewing licensing or special benefits
• Landlords
• Any other third party you give legitimate consent

Make sure you check your credit report regularly for inaccurate information and take a good look at who is checking into your credit with or without your permission.

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