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Credit Scores and the Job Search

CTC | August 7, 2011 | 7:30am

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For years, we’ve been told how important our credit rating is. The higher your FICO score, the lower the APR on your mortgage or car loan or new credit card. And with the collapse of the banking industry, a solid credit rating has become more vital than ever. Radio and TV commercials bombard us with promises to reduce debt and improve our credit. Well, now you can add a job search to the many ways your credit rating affects your life.

An increasing number of employers are running credit, background, or “employment” checks on prospective candidates. Recent statistics are not available, but in a 2006 survey conducted by the Society of Human Resource Management, 43% of its members claimed to run credit checks on at least some, if not all of their new hires. Many experts believe that number has only gone up with the recession.

What does this mean for your job search? Finance industry experts agree: Be informed and proactive. Just as when you apply for a new loan, knowing what’s on your credit report will help you avoid any surprises during the interview process. In a recent post, Dona DeZube, Monster.com’s Finance Careers Expert, stressed this point.

“Find out what’s in your credit report before you start your job search. Obtain a copy of your credit report from each of the three credit services — Equifax,  Experian  and TransUnion – so you’re not blindsided by an inaccurate item that you don’t know about until an interviewer asks”, DeZube wrote on Monster.com.

After reviewing your credit reports scan them for any errors. Should you find any, contact that creditor or institution immediately to have the item corrected. Waiting until you get an offer for your dream job is not the time to dispute discrepancies. At that point, it may be too late, cautions Liz Pulliam Weston,

“If the employer’s decision [not to hire you] was based on erroneous data in your credit report…it could take you months to get the problem corrected – by which time someone else will have been hired for the position you wanted,” Weston wrote in her blog.

Of course, some applicants will have legitimate issues on their credit report. When this is the case, experts recommend being up front with the employer. “[K]eep your answer short, sweet and sincere. Acknowledge the error of your ways. Assure the employer that there was a one-time problem and you’ve changed,” DeZube advised in her blog.

Remember also, that if you are turned down for a position or a promotion because of your credit history, that company has to provide you with a copy of the credit report and explain your rights to you. An excellent website packed with information to help you understand your credit score and how to improve it is myfico.com.

As in so many aspects of life, knowledge is power and staying on top of your credit report can not only mean getting your dream home, it can mean landing your dream job.

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