4 Ways Your Credit Can Help — or Hurt — Your Job Search

If you’re serious about your job search, chances are you’ve polished your resume, picked out an appropriate job interview outfit and maybe even practiced answering some standard interview questions. Yet there’s one important aspect you may have overlooked. What will the human resources department find if they check your credit?

Today, employers may request credit checks on applicants in most industries (except trucking) provided they have written permission from the individual, according to the Fair Credit Reporting Act (FCRA). 1 And the simple truth is there are several ways your credit will either help or hurt your job search. Here are four.

Indicates Organizational Ability

If you make your bill payments on time and stay within your credit limits, your credit report may appeal to hiring managers looking for an organized employee. After all, you planned ahead and budgeted to make your payments, proof you schedule activities and meet deadlines.

Though your potential employer may request a credit check as part of the pre-employment background check, the credit information available to employers is more restricted than details shared with lenders. Also, it doesn’t include your credit score, and may depend on where you live as the regulations differ between states, according to creditkarma.com.2

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Show Your Trustworthiness

Credit records may help your job search if they show you can be trusted, especially if it includes information about paying back a large loan or mortgage as agreed. Being trustworthy is particularly important in human resources roles that depend on trusted and discreet employees to deal with confidential and/or sensitive employee records such as salaries, disciplinary actions, and medical details.

May Point to Risky Financial Situations

While good credit may help your job search, poor credit may hinder it. A spotty repayment history, many open and delinquent accounts, and high monthly payments may worry the hiring officer. This may be especially concerning for positions with access to company funds, such as payroll, and accounting jobs with the potential to steal company funds.

If an employer decides not to hire you because of something in your credit report, they must give you a copy of the report and a “Summary of Rights” including contact information for the company providing the report, according to the Federal Trade Commission. 3

Serious Credit Issues May Halt Your Hiring Prospects

While a less-than-stellar credit report may show a few missed payments or a high credit card balance, this may not be serious enough to turn down an employee. However a more serious issue such as a lawsuit may stop your application in its tracks. Sixty-four percent of respondents to a Society of Human Resource Management said that “outstanding judgments” would likely impact their hiring decisions, according to creditcards.com.4 Accounts sent to a collection agency were also viewed negatively by 49 percent of survey respondents.

To help avoid nasty surprises due to your credit record, order your free credit report early on in your job search.

Sources:

1 https://www.consumer.ftc.gov/articles/pdf-0096-fair-credit-reporting-act.pdf

2 https://www.creditkarma.com/article/job-search-credit-report

3. http://www.consumer.ftc.gov/articles/0157-employment-background-checks

4. http://www.creditcards.com/credit-card-news/bad-credit-employment-checks-1265.php

Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.

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