How good is your credit score?
For most financial institutions, the information contained in the credit report carries as much weight as references and a criminal background check – or more.
“A person’s credit report gives you insight into that person,” Mitchell Weiss, a former banking executive and author of Life Happens: A Practical Guide to Personal Finance from College to Career, tells eFinancialCareers. “If I see a report and it is terrible, I would assume that person is either arrogant or disorganized. I would assume that they would conduct themselves in that way in their professional lives as well. The other part of that is if you see someone with significant problems, they will be distracted at work."
But bad credit doesn’t always have to be the kiss of death.
Strategies if you have a low credit score
Here are a few strategies for keeping your job prospects alive if your credit is shot:
Be upfront. When a hiring manager tells you he intends to pull your credit report, that’s the perfect time to let him know about the dings in your credit history and why they are there. Employers generally tend to be sympathetic to explanations such as unemployment, underemployment, stolen credit, divorce or devastating life experiences like sick children or parents or the death of a loved one.
“You could say, 'I’m digging myself out of a hole and I don’t want you to worry about my ability to focus on the job,'” says Weiss. “I don’t like pulling a report and someone’s told me nothing and then starts spinning the story.”
Be honest. Some prospective employers will ask you if there’s anything they need to be concerned about before pulling your credit.
“The response is often no,” says Laurie Prochnow, president and proprietor of Management Recruiters, a Wassau, Wis. firm that specializes in the recruitment of bank executives. “Then when we get to the point of the offer, it’s usually a surprise. Maybe they think it won’t matter or they didn’t want to bring it up before because they were embarrassed. Sometimes I honestly think they don’t think it would make any difference.”
“Right now, it can be difficult to find someone who has been unemployed for a while with perfect credit,” says Greg Meyer, community relations manager for Meriwest Credit Union in San Jose, Calif. “We are seeing people with a number of credit issues applying for jobs. The bottom line is: Honesty is the best policy."
Proactively address issues on your credit. If information surfaces on your credit report that is inaccurate, incomplete or unverifiable, you can petition the three credit reporting bureaus to delete it, says Jeremy Maher, proprietor of Credit Repair Doctor in Phoenix. Maher says consumers should check their credit often. He notes that you’re entitled to a free credit report each year from AnnualCreditReport.com.
"If someone is unemployed and plans to use the credit report in 60 days, they can get another one,” he says.
Adds Meyer: “In the case of someone being unemployed or underemployed for a length of time, one could place a message on their credit report with all three credit bureaus that they were unemployed ... and had to allow some bills fall into arrears. The message will stay on the report for seven years. These messages … may be helpful in accessing employment or rental housing.”