Many people have a few blemishes on their credit history, but few job candidates are aware that a low credit score can prevent them from getting a job. It is becoming increasingly important for job candidates to polish and protect their credit scores in the same way they do their grade point averages and other resources.
This is especially true for recent college graduates, many of whom live on credit cards and student loans for several years. Upon graduation, they discover that the mountain of debt they incurred to get a great job may be a reason for them not getting a job. While bad credit alone is not disqualifying, when given the choice of two equally qualified candidates whose only differene is their credit scores, an employer will likely opt for the candiate with the better credit score.
A candidate’s credit history reveals his abilty to manage his finances and resources effectively, which is very important in positions that require working with money — such as banking, accounting, and finance. But more and more employers are viewing money management as a strong indication of character, and may be concerened that a high debt load could interefere with a person’s abilty to focus and perform job functions effectively.
According to the Society for Human Resource Management (SHRM), thirty-five percent of employers used credit checks as part of their pre-employment screening process in 2004, up from nineteen percent just 8 years earlier. And there is every reason to believe that this trend will continue. Consider:
- The Internet provides increasingly easy and inexpensive (as little as $10 in some cases) access to credit information,
- Since 9-11, employers have become much more sensitive to workplace security, and
- With employees changing jobs more frequently, there is an ample supply of candidates allowing emloyers to be more selective.
Job candidates should know their credit score before they start job searching. You can get a free credit report once a year at AnnualCreditReport.com. A score of 620 or higher is generally considered good, and 700 or higher is considered excellent. If your score is less than 620, you should be prepared to address those issues with prospective employers. If they ask persmission to check your credit history (they must ask permission), be upfront about any credit problems you’ve had and explain what you’ve done to correct them.
And finally, job candidates should understand how to protect their credit scores. Just because you’ve paid your bills on time, you may still get dinged if you’ve just applied for a car loan and several credit cards, for instance. Even closing inactive accounts may have an adverse affect on your score. For more information, you may want to look at the “Credit Score Tips and Advice” blog. It is written by a former credit counselor who has a heart for helping people manage their credit.