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A bad credit report can hurt employment prospects

by Francine Huff

Some job hunters have been surprised that employers sometimes check credit reports in the screening process. But employers can legally check your credit report to evaluate how responsible you are financially as long as they comply with the Fair Credit Reporting Act (FCRA). Employers can pull credit reports for job candidates, and they can also access this information when considering current employees for promotions, reassignments, or retentions.

Get Notification in Writing

Before a company can pull your credit history, however, it must notify you in writing and get your written authorization. Depending upon the job you are applying for, an employer also may investigate your driving record and criminal background. Most companies ask for references, and some may go so far as to interview friends or neighbors as part of the screening process. A bad credit report isn't usually the only reason an applicant is turned down for a job, but it can be a deciding factor when choosing between candidates with similar qualifications.

Reveal Credit Report Information Early in the Process

So what can you do if you have bad credit and are searching for a job? Take the following steps if you have a low credit score and think it could be a factor in getting hired:

  1. Let potential employers know early in the process that you don't have the best credit report. For instance, if you have missed credit card payments because of a layoff, be up front about that. Let recruiters know that you are addressing problems in your credit history.
  2. Ask your recruiter if providing a copy of your credit report will help them address the issues with the employer. Being willing to discuss potential problems with the recruiter shows that you are honest about your situation. It also gives them the time to assess how to handle communication with the employer.

  3. Avoid giving too much detail about the circumstances surrounding items that show up on the report. For instance, it won't look good to go into a long story about how your no-good ex signed up for multiple credit card offers and put your name on the applications or to reveal intimate details about a divorce. Explain your situation briefly and emphasize that you are addressing credit card debt and other problems.

Emphasize Qualifications for Job

Do your best to help potential employers focus on your qualifications and previous job history instead of your credit report. Be as personable as possible and emphasize that you are a hard worker who can bring something to the table if hired.

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