How Your Credit Score Can Affect Your Ability to Get Hired

Most of us are aware of basic understanding around a credit score- the fact that we have one and it is used when applying for credit. But did you know that you credit score can also affect unrelated factors such as your chances for employment with some companies and industries? When most people hear that their credit score can affect their chances at some employment, they are understandably shocked. Some employers use your credit score as additional information when deciding on whether you are a fit for the position or company you are applying to. Read on for more details.

Let’s start with a refresher on what your credit score is and what it entails. Your credit score is a reflection of your current outstanding debts as well as closed loans and accounts. The credit companies will receive information about your credit available as well as the payment history you have shown on those debt payments and input it to create a credit score. Your credit score is a three digit number that is then generated and provided to potential creditors when you apply for credit. Creditors use it to decide how likely you are to pay back a loan. The higher the score, the more beneficial. Your credit score will impact the credit opportunities you are allowed as well as the interest rates you will receive when getting your payback terms. A high credit score can open you up to multiple options, while a low score has the potential to severely limit your options. If you don’t use credit at all, you may not have enough information to generate a credit score, which can be difficult, but favorable to a low score.

Most people are aware of their credit score when applying for a loan or other type of credit, but few realize that having a low credit score can keep you from some employment opportunities. Most prevalent in financial industries or positions, a credit check can be performed to show your employer a snapshot of your responsibility around money and repayment. If you are helping others with their money, they may want to see that you are able to handle your own. In their eyes, the way you repay your loans goes hand in hand with your trustworthiness and reliability. If you are handling other people’s money, employers would like reassurance that you will be able to do so responsibly. Many positions with extensive background checks (think law enforcement, government work or contracts) will also check your credit as a determination of whether you qualify for the position. Employers want to see a theme of responsibility and trustworthiness and a credit score is one way to use outside information that is available to make that determination.

While it is understandable why an employer would use any information available about a potential employee to determine their suitability for employment, it may not alway be an accurate or fair representation of your personality or resolve. Sometimes circumstances create rough patches in your credit history. With proactive work and attention, you can help raise your credit score and the impression you give future employment. If a credit check will be part of the hiring process, explain ahead of time the situation behind your credit score. If it was a specific circumstance that was either out of your control or you learned great lessons from, it may be appropriate to explain. If you know you need a higher credit score regardless, work on cleaning up your credit. Work on bringing accounts current, removing old issues from your report, or disputing inaccuracies that are affecting your score. Given time and some elbow grease, your credit score should go up, as well as your chances for employment.