Finding a Job with Poor Credit — What You Need to Know

Job hunting is stressful at the best of times, but if you’re pounding the pavement looking for work while dealing with poor credit issues, it can be even worse. Some employers might check into your credit background depending on individual state laws.1 If you’re concerned about your credit while job hunting, here are a few things to keep in mind.

Why Do Employers Do Credit Checks?

Employers may use credit reports to try and get a broader picture about who you are. It may give them an idea of what your lifestyle is like in terms of your history of borrowing money and repaying it. They may consider your credit information an indicator of integrity, trust, responsibility, and your ability to budget and commit to a schedule. However, though your employer may check your credit, keep in mind that the information they see from the credit reporting agencies does NOT include your credit score.2

How to Explain Poor Credit When You’re Job Hunting

If your credit is less than stellar, think about how you will explain the credit issues on your report, as well as what you’ve done to correct them. Be upfront and honest about your credit issues, particularly if they were due to situations such as health concerns, periods of unemployment, or family issues such as divorce or caring for elderly parents.

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Bring Supporting Documents if Needed

If you have any letters or documents that support your efforts to rebuild your credit you may want to bring them along. Copies of letters showing you’ve paid off delinquent balances, made arrangements to make revised payments, or even confirmation letters of errors on your credit report show hiring officers that you’re conscientiously trying to fix the credit issues.

The Legal Rights of Job Applicants Regarding Credit Checks

The first thing to keep in mind if an employer says they want to do a credit check as part of your job application is that they must have your consent to do so, according to the Federal Trade Commission website.3 In addition, you may be protected by additional state or municipal laws depending on the area you live in, so check your state and city regulations regarding credit checks as part of a job application.

What To Do If You’re Turned Down For a Job

If you are turned down for a position due to the information found on your credit report, you’re entitled to receive a copy of the background report along with what’s known as a Summary of Rights. The Summary of Rights explains your rights under the federal Fair Trade Reporting Act, which governs the release and use of credit report information.4

Though you’re within your rights to withhold your consent for your employer to do a credit check, think carefully about how they may view this. Potential employers may become suspicious that you are hiding something worse than whatever is actually on your report. It may be wiser to authorize the credit check with a detailed explanation of what led to the credit issues in the first place.

The articles and information provided herein are for informational purposes only are not in any way intended as a substitute for professional advice.

Resources:

1 & 2 http://www.creditkarma.com/article/job-search-credit-report

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

4. http://www.consumer.ftc.gov/articles/pdf-0096-fair-credit-reporting-act.pdf

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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