What happens when an employer requests a background or credit check, but you know you have bad credit? More employers than ever are conducting background checks that can include an investigation of your credit status.
Keep in mind that credit checks are most common for employers in financially sensitive industries such as banking, accounting, cash businesses and government agencies. Larger organizations are more likely than small employers to take on the expense entailed with investigating your credit.
When Employers Check Credit
Keep in mind that, if the employer does it, a credit check will usually be carried out after a first interview. Prepare a compelling interview presentation establishing how your strengths will enable you to generate positive results. Cite concrete examples of how you have applied key skills to the benefit of previous employers. If you wow employers at your initial meeting, then they may be more tolerant about a suspicious credit history.
Advance Notice of Credit Checks
Employers are required by law to secure your permission prior to accessing your credit information from a credit agency. So, you’ll have some lead time if you do find out they’re asking for a credit report. If you have a flawed credit history, you should offer to address any concerns, and also consider targeting organizations that will be less likely to investigate your credit. Read on for tips to help increase your chances of getting hired when you have bad credit.
Tips For Getting Hired When You Have Bad Credit
Research your credit rating by requesting a free copy of your credit report from one or more of the major agencies – Equifax, Transunion or Experian. This way, you’ll have a sense of what you’re working with, before your potential employer accesses the information.
Fix credit mistakes. If you know of any corrections you need to make for inaccurate credit issues, submit them now to the agencies so they are processed and become part of your file.
Draft a letter of explanation that addresses each of the issues detailed in your report. You can use this document as a handout for employers when credit issues are discussed. In your letter of explanation, incorporate any contributing circumstances that have changed, such as unemployment or family illness. Employers are more likely to be understanding if you have provide a compelling rationale as to why your credit score isn’t great.
Develop a plan to address credit issues, such as loan consolidation, refinancing debt or a payment agreement with a credit card company. Consult a credit counselor for assistance.
Be prepared to explain the situation. In your communication to the employer about your poor credit, be sure to emphasize any changes in your consumer behavior, such as moving to debit cards instead of credit cards, to demonstrate that you have addressed the root causes for your credit problems. Perhaps you’ve taken a course in money management, or used a new personal finance strategy. Though you want to withhold from sharing too much information, it is important to let your employer know that you’ve learned from your mistakes and that you’ve taken the proper steps to avoid further problems in the future.
Practice what you’re going to say. Practice the delivery of information about your credit history so you can present the information smoothly and effectively. As you discuss your credit background, point out how your credit problems did not impact your previous job performance.
Obtain recommendations from previous employers that include strong statements about your integrity and character. Offer these recommendations to employers when credit issues arise.
Check out small companies. As you conduct your search since, try to apply to smaller organizations, as they will be less likely to conduct background checks.
Consider the use of networking as a job search strategy, tapping into your professional network to find out about job leads or open positions that your connections might be able to refer you to. Approaching an employer with a strong endorsement might mitigate some of the negative effects that a bad credit score can have.
Look for companies that don’t check credit. Reach out to your contacts, or research online, to identify companies that don’t conduct credit checks as part of the hiring process.