How Your Credit Report Can Affect Your Career

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It may be debatable, but it is an undeniable fact that your credit report can affect your job search and potential promotion. Employers may use the information found in your credit reports during the hiring process and consideration phase of a promotion. Therefore, a good credit report can give you an advantage in the job market. Conversely, a credit report with late payments and collections may cause a company to pass you over.

Why is my credit relevant for a job?

About 25% of employers check credit for certain positions they hire, according to 2018 report.  About 6% of employers check the credit of all potential employees. Employers tend to be more proactive in checking credit reports for those who are in financial positions or handling money.  Why?

Someone that has handled their personal finances poorly is not likely do a good job handling the company’s finances. Those late payments may indicate that a potential employee is not responsible or organized. If you are in banking and accounting, you’re more likely to have your credit checked. Also, a retail job may consider your credit report as well, as you may be handling money. Any potential employers may consider someone with past due payments or judgement notices as a risk. They may be more likely to commit theft or fraud, for instance. Also, the same principles apply to those already employed. Tight competition  makes employers look for ways to differentiate candidates. If an employer has two candidates for a job or a promotion with similar or equal qualifications, they need a difference maker.

Keep in mind, there are 13 million workers unemployed in the United States. As a result, the job market is very tight and your credit report may be the difference between success and failure.

Is it fair for employers to check credit?

This is where I hear my father’s voice or just about every coach I ever had growing up: “Life isn’t fair!”. Wish I had a dime every time that little cliché was lobbed at me! Personally, I think it is very debatable if this is a “fair” or effective way for employers to make decisions on a prospective employee. After all, people will go through massive personal upheavals throughout a lifetime. Think about it. Divorces, company closures, death of a family member and a virus transmitted through the air to name a few. These life changes can be financially devastating. As the “Rock” would say, “Doesn’t matter what you think!!!”. Many companies do check credit reports, so the point is to be prepared as best you are able.

How can I prepare myself for a credit check?

They say that the best time to plant a tree was 20 years ago and the second-best time to plant a tree is today. The same can be said for personal finances so get cracking!

If you have made your finances a priority, then you have a spending plan and you manage to review your credit regularly. If you have not made your finances a priority or maybe you went through a financially draining divorce or some other life event that negatively impacted your finances, start now. Do not wait another day to act. Our Credit Health Education session can provide guidance on how to build credit and set credit building goals. If you need help to pay down creditors or collections, we can help. We work with creditors to potentially lower your interest rates and organize your repayment with our Debt Management Program.  Take action today!

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