There’s been a lot of talk and worry lately about your credit history affecting your chances of getting a job. Now we all know that your credit history has a direct affect when it comes to applying for loans or credit cards, meaning you should take care of any credit problems well beforehand, but employment? What does my credit history have to do with whether or not I would make a good employee?
Credit Checks for Employment Are (mostly) a Misconception
According to a 2010 survey from the Society for Human Resource Management, only 13 percent of hiring managers said they conducted credit checks for all employees.
In fact, New York state just recently passed a bill to ban credit checks for most job seekers. This bill will prevent all but a few very specific types of employers from using their credit history for hiring, promotion and retention decisions. There is no proof that your credit history is indicative of job performance so using someone’s history is unfair and discriminatory. Ten additional states as well as the City of Chicago have also passed this bill.
What Positions Do Require a Credit Check?
When credit checks do occur, they are pulled for specific positions related to the financial industry, data security and the government. This makes sense when you think about it; these positions require someone who is an expert with important numbers and money, not someone who desperately needs help with credit card debt.
What they look for typically are patterns of money mismanagement and unresolved debt. Student loan debt or medical bills are usually not considered. The good news is that there are ways to prepare your credit check if you are in fact interested in these careers.
How Can I Prepare For An Employer Credit Check?
Remember, a company must have your written consent to pull your credit report. Before applying, it’s a good idea to request one for yourself. This way if you see any errors, including inaccurate information, you can dispute them to avoid a negative affect on your credit score.
If there are some skeletons in your closet that you won’t be able to fix before an employer sees it. Be honest about it. It looks better knowing that you’re aware of your financial situation than trying to lie about it. In the event they do decide not to hire you based on what they’ve found, they have to tell you how that has influenced their decision and they will usually allow you to respond.
To speak to a credit counselor today about budgeting and managing your finances, call 800-769-3571.