Poor Credit Can Stop Your Career Dead In Its Tracks

The three little numbers that make up your credit score can have a huge impact on your life. You know that poor credit makes it difficult to get a loan and that when you do get a loan, you’ll pay a higher interest rate. You know that your credit score impacts the limit on your credit cards, but did you know that it also has an effect on your ability to get a job?

It seems silly that your credit score, which is primarily used for getting a loan, has any effect on your job search. One scenario deals with your ability to repay a loan and the other relates to your ability to be a good employee. They seem completely unrelated. Unrelated or not, it’s true. Your credit score does factor into your employability and a poor credit score can stop your career dead in its tracks.

Why Employers Care About Your Credit

Like it or not, your credit history does give an indication of your level of responsibility. Failure to consistently pay your bills on time indicates to an employer that you’re irresponsible or disorganized. There is a correlation between your ability to manage your personal finances and your ability to do your job. From the employer’s view, if you can’t do something as simple as paying your bills, how can you handle job responsibilities that are much more complex.

Now, if you have some problems in your past don’t lose hope. Just because you have poor credit, doesn’t mean that you can’t get a job; however, it will limit your options.

Forget about Finance

One career path that will be closed until you can improve your credit is finance. Banks and finance companies deal with millions of dollars every day. They have very tight controls in place to ensure the safety of that money. One of those controls is making sure that an employee doesn’t have any incentive to do something in appropriate with those funds.

You end up with a low credit score because of some kind of financial issues. It may have been something out of your control such as a medical emergency, but the bottom line is that money was tight and you couldn’t pay your bills.

While there is no data that shows correlation between credit score and occurrences of theft, employers still believe that personal financial problems provide motive to steal or embezzle money. Now, you may have outstanding moral character, but your prospective employer doesn’t know you outside of the short amount of time that you spent interviewing. They have limited information on which to judge you. Unfortunately, your credit score speaks loudly and will prevent you from getting a job that involves handling money.

Employers Want to Avoid Drama at all Costs

Nothing kills productivity more than drama in the work place. Finances are often a cause for workplace drama and conflict. No workplace will be drama free, but employers will do all that they can to avoid it. One way to do this is to weed out candidates that have a high potential for drama.

If you’re dealing with personal financial issues, it’s going to boil over into your work. You’ll be distracted, productivity will decline and you’ll be more likely to say or do something that causes a little bit of drama. Again, maybe that’s not you. Drama may be the complete opposite of your personality, but your potential employer doesn’t know you. They just know your credit score and they know the how often personal issues overflow into the workplace.

What Can You Do About It?

First of all, check your state laws. If you live in California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, or Washington, employers are limited or outright prohibited from using your credit report in a hiring decision. In the remaining 40 states, employers are free to use your credit to make a hiring decision; however, you will have to sign a consent form in order for your credit to be pulled. If you know that your credit is poor, be up front with the employer before you sign this consent. If you are able to provide a good explanation for your negative credit history prior to the report being pulled, you stand to lessen the impact of your poor credit history.

You should also be proactive about improving your credit score. First and foremost, make sure that all payments going forward are made on time. If you’re not able to make your payments, contact your creditors and work out a payment plan. Just ignoring the problem is the worst thing you can do. Secondly, speak to a credit repair agency. Depending on the situation, they may be able to remove some of the negative marks in your past. Be sure to check reviews before you pay a credit repair agency though. There are a lot of ineffective companies that will charge a lot of money and won’t provide any results.

A reputable company will have numerous reviews, with the majority being positive. For example, take a look at customer reviews for Lexington Law, any credit repair company should have dozens of positive reviews on Yelp with salient details of consumer experiences with the company.

Over time your credit will improve. Even in the most extreme cases, one to two years of positive payment experiences will drastically improve your credit score and your ability to get a job. In the mean time, you may have to take a less desirable position. Don’t let that discourage you, but let it be a motivator to get your personal finances in check to pursue the career of your dreams.