Can Bad Credit Keep You From A Job?

These days, it's common for a company to require you to submit to a drug screening, a background check and even a credit check. It's a tough position to be in. Interviews are already stress-filled enough, but to have to discuss your credit history and other personal information can make it even more difficult. Once an employer has access to your credit report, they can gain a great deal of information about you, not just whether you have good credit or bad credit.



There are seven states that have passed laws preventing employers form checking credit reports - California, Connecticut, Hawaii, Illinois, Maryland, Oregon and Washington. If you don't live in one of these states, there isn't much you can do when an employer asks to pull your credit report. All you can do is get prepared.



If an employer asks to pull your credit, here are 4 things you should know:



What can they see? - First, you have to sign a release for them to be able to access your credit file. From there, the credit reporting agency (Experian, etc) will remove the information that employers aren't allowed to consider, such as age and marital status. After that, they will be able to see any bankruptcies, judgments, liens, a list of all of your loans, mortgages, credit card accounts and so on. Be careful about this because since they are able to see all of your credit lines, they will also know about any store cards or other lines of credit. This means that your employer will know where you like to shop.



Have an explanation - It seems strange to me that you would have to explain your credit history to a potential boss, but in these situations, that's all you can do. The best thing to do is to keep your answers short and to the point. If you have bad credit, acknowledge it and move on. You can offer an explanation and show that you have done your best to improve your credit history. Keep in mind that if your application is denied because of your credit report, the employer has to give you a copy of the report.



Be sure you don't lie on your application or resume - Your credit report also keeps track of your previous employers. Of course, the information isn't secret, but each time you apply for credit and list an employer, the credit reporting agency keeps a record of it. So, if you  have several past employers on your credit report, make sure you have the same employers on your resume.



Get a copy of your report - Each year, you are entitled to a free copy of your credit report. Before applying for jobs that require this type of check, get a copy of your report and find out what's on it. If there are errors, you can ask the agency to correct them. In any event, having a copy will allow you to know what the employer will see ahead of time.