Through our blog posts this month, you’ve seen how your credit report can impact your job search. Significant negative marks can hurt your chances for landing that new job! So what can you do to maximize your report and your chances?
Start with pulling credit reports for yourself. The official site created in response to the regulation that you deserve to know what’s on your report is www.annualcreditreport.com. Due to COVID, you can get all three reports weekly through the end of April 2021. If you already have a credit card, many of them will let you view a report for free. You can also use sites like Credit Karma or Credit Sesame, just be wary of ads that try to lure you to take out more credit than you need.
From there, there’s three simple things to do prepare your credit before a job hunt.
1) Dispute Incorrect Information
While you can’t erase negative information that’s true, there are often errors on credit reports. Maybe they aren’t showing that you paid off an old medical bill, or there’s a cable bill that isn’t yours. While you can still do the disputes by phone or in writing, doing them online is quick and gives you a good “paper” trail of your requests. Here are the links for each bureau, since you do have to submit each individually:
2) Pay Off Any “Bad Debt” You Can
I always cringe at that term since it’s vague. But in this case it means two things:
- Past due amounts on open accounts. Aim to catch up any loans or credit cards that are 30 days or more behind. (Just make sure you don’t fall behind on regular monthly bills to do it.)
- Collection accounts. If bills go unpaid long enough, the creditor can hire a third party to collect for them or can sell off the debt to a collection agency. These are red flags for an employer, so getting as many as you can paid off is ideal. Collections that are settled (fulfilled the obligation by paying less than the full balance) will still show up on the credit report, but should show a $0 balance. Collections paid in full are removed from the report entirely.
3) Prepare a Simple Explanation
Employers are required to get your permission to pull a credit report, so if you know there’s unresolved problems there, you get to provide a lens for how they’ll read it. If you fell behind due to COVID, let them know briefly what they’ll find and why. If you struggled a couple years ago with a divorce and separating debt, you can say so and that things are on a payment plan now. Don’t go into minute detail or try to lay blame. It’s just a chance to put yourself in the best light you can, and the short story might make you more memorable which is half the battle with job interviews. It’s also shows you take ownership and are competent to solve problems – the other half of the battle.
Most creditors report to the bureaus only once a month (and collection agencies sometimes less frequently), so start as soon as possible. If the collections aren’t updated within 30-45 days, see the notes above about how to dispute. While it’s not required that you have proof of payment to dispute, it definitely helps – so keep good records of your hard work.
Going Deeper to Prepare Your Credit
Apprisen has lots of tools to help in the process, and we’d love to come alongside you to help prepare your credit for a job hunt. Whether it’s help reviewing the credit reports, making a financial plan for the debts, or creating a workable budget as you transition to a new job, we can help. Call us at 800-355-2227 or submit your financial information using our secure financial health expert tool IRIS to get a free financial analysis and an action plan.