Most people recognize the importance of their credit score and its effect on their ability to borrow money. It affects not only your ability to get a loan, but also under what terms and at what rates of interest. But credit scores have an impact beyond credit. One of the biggest areas is in regard to employment. Your credit score can affect your job search, which is why it’s important to make sure you always have a healthy credit score.
A good credit score will remove credit as an obstacle to getting just about any job you want. But a poor credit score can hurt you in several ways.
You May Be Eliminated from Employment in Certain Fields
How much weight an employer will give to your credit score will depend upon the industry that the employer operates in. There may be certain industries where credit scores aren’t even pulled, because they won’t affect the outcome of the employment decision.
But other fields are highly credit score sensitive. Finance and banking quickly come to mind. It will be difficult to secure employment in these fields, when they specifically depend on the ability of their customers to honor their obligations and to make payments on time. It is possible that poor credit could eliminate you from employment entirely in certain industries.
Understand however, that we’re not only talking about sporadic late payments here and there. We’re also talking about a low credit score that has been caused by more serious delinquencies, such as a pattern of slow payments, overdue and unpaid obligations, foreclosure, and open an outstanding public records.
Large, unpaid and past-due obligations could make it impossible for an employer in certain fields to hire you. That could actually force you into finding a new career where credit credit scores are not nearly as important.
Credit Problems Could Keep You From Jobs With Financial Management Responsibility
Even in industries where credit is not as important, poor credit could prevent you from landing certain jobs. This will certainly be true in regard to jobs that involve financial responsibility. This can apply to certain accounting positions, credit collections, or even being a cashier.
Financial management is a special concern. If an employer is hiring you to help them manage their financial situation, they will understandably be reluctant to hire someone who has not demonstrated a pattern of successful personal money management. A low credit score and a history of bad credit can indicate exactly that.
There may even be concern of the potential for theft if you’re in a position where you’re handling cash. Employee theft is often the result of obligations that the employee cannot handle from his or her regular paycheck. The employer may use your credit score as a barometer to screen out people who may fall into this category.
Your Level of Debt May Exceed the Salary Being Offered
This is another credit related problem that can be an issue in regard to just about any job in any career field. If after reviewing your credit report, a potential employer determines that your level of obligations either exceeds or severely stretches the salary that they are willing to pay for the position, they may decide that you are not the best candidate for the job.
The high debt level could put you under pressure to make more money than the position pays, or ever will pay. In addition, there may be concern that your attention will be disproportionately focused on your outsized debt obligations, and that could have a negative impact on your ability to do your job.
A low credit score, indicating a history of slow payments and non-payments, could be a sign that you have reached the breaking point in your financial situation. If that is the case, the employer may see you as a potentially high-risk employee, and decide to eliminate you from the candidate pool.
Open Past Due Accounts
A slow payment history may not present a problem for a potential employer, particularly if you are coming off of a period of extended unemployment or some other calamity. In fact if you do have credit problems related to a specific event it’s often best to explain it to the employer before your credit report is even pulled.
But if your credit report is littered with open and outstanding past-due accounts, it could put an end to your application. The employer may suspect that you either lack responsibility, have little control over your personal life and behavior, or otherwise represent an accident waiting to happen in some form or another.
A big part of the employment screening process today is directly related to risk reduction. An employer wants to know that the people they are hiring are not likely to result in some sort of liability for the company at some point in the future. A low credit score and a history of non-payments can indicate just such a risk.
Get Help and Fix Your Credit as Soon as Possible
Considering just how important your credit score is when you’re seeking employment should provide motivation to fix your credit if it indicates significant impairment. Ironically, a new, higher-paying position may be exactly what it is that you need to get your credit house in order. Unfortunately, you may not get the desired better job if your credit is fair or poor.
You should do what you can to fix your credit as soon as possible. And if you don’t feel that you have the knowledge, skills or time to do that, you should absolutely get help along the way. There are firms available to help you to repair your credit, and even to lower your debt obligations if necessary.
Repairing your credit – and landing a new, better paying job – may be exactly what you need in order to build a better financial future for you and your family.