Can Bad Credit Affect a Job Search?

Your financial past can have a very real effect on your employment future, especially if you’re working in an area prone to security issues, theft or fraud. In situations such as those, financial difficulties can be viewed as temptation. So the short answer to the question; can bad credit affect a job search is yes—it can.

However, as with so many other things in life, the real answer is—it depends.

 

Where Are You Looking?

If you’re seeking employment in California, Connecticut, Hawaii, Illinois, Maryland, Oregon, Vermont or Washington, employer credit checks are restricted. Further, if you’re seeking employment with a company concerned about adhering to discrimination laws, credit checks happen only when a verifiable business case can be made for doing so. If you’ll be handling cash, granted a company credit card, or dealing in company secrets, they’ll do some digging.

Your Permission Will be Asked

Potential employers are required by law to ask for your permission before they can dig into your credit information. You can refuse, but in most cases, that’s also pretty much saying you don’t want the job. After all, if you refuse, they’ll usually move on to a candidate willing to be investigated—all other things being equal.

What They’ll Find

Unlike when you apply for credit, an employer’s check will not reveal your credit score. However, they will get a pretty detailed look at your credit history. This will include a list of delinquencies, bankruptcies, judgments and liens. They will also see all of your reported loans, mortgages and credit-card accounts.

The Fair Credit Reporting Act (FCRA)

In addition to requiring employers to ask your permission and limiting what they see, the FCRA mandatesemployers provide you with a copy of the report before refusing your employment based upon information it contains. This is to give you an opportunity to challenge errors. Of course, this doesn’t mean they have to tell you the report was your undoing. They are required do so in theory, but truthfully, it could go either way in practice. They can always say it was something else—or offer no reason at all, other than they chose another candidate.

Know For Yourself

Still though, it’s extremely important to check your creditreport annually to see what it contains. This way, you don’t get any untoward surprises. The FCRA entitles you to get a free copy of your credit report each year in order to facilitate this.  If you find mistakes, contact the creditor(s) in question and get them to correct the errors as soon as possible. On the other hand, if there are factual issues there, you’ll have to live with them. Challenging them won’t make them go away.

If Finances Are Currently an Issue

If you’re currently going through a situation in which things are tight and you can’t afford to service your debts, a company like Freedom Debt Reliefcan help you significantly reduce the amount you owe, to help you get out of debt faster.

So, long story short, bad credit can indeed affect a job search. However, if you’re careful with your finances and strategic in terms of the way you deal with your money problems you should be able to pass an inquiry and get the job you need to better your situation.