Bad credit can affect you getting a job – can your bad credit and personal finances affect your job search? The answer may surprise you when applying for a job.
A recent survey of 35-54 year olds published by the National Financial Education Council found that over 25% of respondents were subjected to a financial background check (or credit check) as a condition for their eligibility to get hired or promoted. Additionally, almost 30% of respondents in the survey were reportedly unsure if their employer performed a financial check beforehand, and 5% of respondents said that they were turned down for a job or promotion as a result of one of these checks (18% were unsure).
With these survey findings in mind, it’s important to understand the implications of your financial situation in regards to either your favorability as a potential employee or your chances at scoring that big promotion. If you’re trying to
Bad Credit and Getting a Job
If you’re trying to compete in the current job market, consider these ways that your personal finances might affect your employability:
Money-Related Stress Affecting Job Performance
Empirical studies have found that money-related stress can distract employees from their jobs and make them late or absent more often than employees who aren’t struggling financially. Understandably, it’s incredibly difficult to ignore thoughts of impending bill due dates, skyrocketing credit card debt, debt collectors harassing you, and even the possibility foreclosure or bankruptcy lingering in the back of your mind while you try to go about your daily professional life.
You’re not alone, however. A large survey conducted by the American Psychological Association in 2014 found that money was the #1 stressor among adults, with 72% of Americans reportedly feeling stressed about money just in the last month, and 22% of Americans feeling extreme levels of stress when it comes to money. Stress is inherent to almost any job, but when your personal stress follows you into the workplace, it can negatively impact your job performance if left unchecked.
According to the NFEC, over 25% of job applicants are subjected to a financial background check.Click To Tweet
Perception of Poor Credit = Poor Employee
Some employers believe that a job applicant’s credit background could be a useful indicator of their future worth as an employee, especially for positions that require some level of financial management. If you don’t have good or excellent credit, you might find it difficult to compete for a finance-related job, but don’t assume that these types of jobs are the only ones that require credit checks as a condition for employment. There are many different types of jobs that require some level of investigation into the employee’s financial background, including some Department of Defense jobs.
A member of the military who’s not managing their debt well might lose their security clearance because “a soldier in debt is considered more open to bribes or accepting money in exchange for revealing secrets.” While this isn’t the case for several other private and public sector jobs, it’s still worthwhile to check your credit report and stay on top of your finances as much as possible to prevent your personal life from spilling into your professional life.
If you’re struggling with debt, you may benefit from consolidating your debt. Transferring balances from one credit card to another is a great way to consolidate your debt. You can find offers for some of the best balance transfer credit cards on the internet to help you.
Turning Down a Credit Check
It is legal for employers to check your personal credit history, but there are a few requirements, including written permission from you beforehand. Unless the employer explicitly states that a credit check is required for the position you’re applying for, then you could refuse to let them check your financial background. In many cases, this won’t automatically disqualify you from the position, but it could potentially hinder your competitiveness as a candidate for the position.
If you are confronted with a potential employer who wants to perform a credit check and you don’t want to flat-out refuse, then you might consider writing them a letter to explain your bad credit to demonstrate why your low score and/or scattered credit history should not reflect your viability as a good employee. You can add your own “personal statement” to your credit report itself by requesting a copy of your report and submitting a 100-word explanation to all three of the major credit reporting bureaus.
Am I Out of Luck?
In most instances, struggling with debt or cleaning up a poor credit history won’t be automatic disqualifiers from a new job or promotion. Some employers don’t perform credit checks at all, but if you find yourself in a situation where you are subject to a check, you can either deny permission, rely on a short statement published directly on your credit report, or discuss the circumstances directly with your employer.
There are many ways to manage your debt in the meantime, and you can regularly check your credit score on sites like Credit Karma to track your progress.
Bad credit can affect you getting a job. Should your bad credit and personal finances affect your job search?