Ask the Experts: Bad Credit History Will Hurts Your Chances of Finding Employment
Question:
Many companies perform background checks, including a credit check, before hiring new employees. Because I was laid off 18 months ago and have been unemployed since then, my once spotless credit history is now terrible. I feel that my credit history is now preventing me from obtaining a new position. What should I do?
First Answer:
Many people are having financial difficulties, these days and it’s nothing to be ashamed or as long as you are doing whatever you can to clear up your
debt. Hopefully, you are working with a service that makes a “plan” for
your spending, so you can get back on your feet.
That being said, I do not think that a less-than-sterling credit history would really be an obstacle to hiring you for most jobs and I’m wondering
why you think this is so. I would suggest that you focus on what you can
do for the company, and not feel “jittery” about the fact that they might
discover you’re in debt. Actually, an employee who really needs the job
would be a motivating factor, wouldn’t you think?
It sounds like you have a lack of confidence more than anything else. In my book, YOU ARE THE PRODUCT: How to Sell Yourself To Employers, there are many tips you can use that
will help you gain confidence, look assured, and promote yourself to a wide
variety of prospective employers. A “freebie” on how to fit in with any
organization’s corporate culture can be found at: http://www.metrotribe.org/yatpcorpculture.html. See? You’ve saved money
and moved forward with your life and career, already without spending a dime!
— Alison Blackman Dunham, life & career expert, columnist, personal public relations consultant, half of THE ADVICE SISTERS®, and the author of the ASK ALISON career advice column
Second Answer:
You might want to consider two things:
- Think about contacting an agency like Consumer Credit Counseling. They will work with you and your creditors to help correct some of the problems
your period of unemployment caused. Many times they are able to work with
your creditors to help “erase” some of those spots. - At the end of the interview period when asked if you have any questions, ask them if they are going to run a credit check. Explain your
circumstances to them briefly (Do not go into long, sad details of the last
18 months.) Let them know that you have contacted your creditors and have
worked out a plan to help rectify this situation as soon as you become
employed.
Addressing the issue honestly and upfront will help you keep a little control in this situation and it will also help the employer know what to
expect when he checks your credit.
Not to negate the fact that this is an important issue, but employers, who are aware of the ups and downs of today’s job market, are not blind to the
problems unemployment causes. If they are interested in you they can run a
more extensive credit history that will show them the history before the
period of unemployment.
— Linda Wyatt, Career Center Director, Kansas City Kansas Community College
Third Answer:
I am sorry to hear that you were laid off and have been unemployed for the last 18 months. The financial burden this posed for you is justified. Many people in the past two years have been faced with similar situations; some have even had to file bankruptcy. Have you considered meeting with a financial advisor to learn how to consolidate your debt? Many creditors will work with you and come up with a revised payment schedule if you approach them with your current situation. Presumably you are doing whatever you can to prevent incurring further debt. Suze Orman has some good books regarding this topic; you can thumb through them at any bookstore.
Regarding prospective employers – credit/background checks are usually the last hurdle one must leap. Honesty is always the best policy. Any potential employer is aware of your unemployment from your resume. When it comes time for the check during the interview process I would suggest you be honest with your potential new boss. Explain not only how you got into this situation but the steps you have taken to get out. In some financial companies, your spotted record may disqualify you – but the integrity and honesty you show will leave a good impression. In today’s unstable market you never know where you may bump into this person again.
If you are still wondering, work with a professional coach who can guide you through the process easier and faster. I am offering a 20% discount on one month of coaching to anyone who mentions this article.
— Janine A. Schindler, Professional Coach and owner of the Jas Coaching Company
Fourth Answer:
Taking steps to rebuild a credit history wrecked by a long bout of unemployment, including consolidating your debts with a nonprofit credit
counseling organization (make sure they are nonprofit; fees will be much
lower), and being upfront with an employer who asks you to authorize a
credit check about your situation and its cause, are the right things to
do. They demonstrate that you are a responsible adult.
However, manage your own expectations. The reality is there are jobs where being in financial distress, even temporarily, is considered too
big a risk, notably jobs in financial services, or any job in which you
have access to recording financial transactions or cash or act on
behalf of a company in balancing its own investments, which means all
accounting, treasury, and controllership functions. You are considered
especially vulnerable to the temptation to divert funds. Many federal
agencies such as the IRS and intelligence agencies view financial
distress not as a motivator to work but as a situation that might push
you to take a bribe to deliver a favorable tax audit, or even flip you
to spy for the enemy. Nonprofits won’t want you involved in fundraising
efforts either.
If you are job seeking in these areas, better to rebuilt your credit and get a healthy credit report before applying. In the meantime, stick
to employers less likely to do credit checks (smaller companies,
nonprofits, hospitals, universities) and nonfinancial functions
(marketing, engineering, human resources, teaching, social work,
depending, of course, on your qualifications).
Once you get re-employed, this will seem like a temporary setback and will be behind you, unlike a felony conviction, for an example of a
bigger cloud. Broaden your job target, turn up the energy on your
search, and sell your skills fit!
— Carol Anderson, Career Development and Placement Office, Robert J. Milano Graduate School of Management and Urban Policy at New School University in New York City
