4 Tips for Getting a Job With Bad Credit

Payscale

By Thea Nyberg

creditMaria W. * had just interviewed for her dream job at a PR agency. The meeting was positive and she was hoping for a job offer when she got the call. "I was informed that they had decided to go with their second-choice candidate," says Maria. "I had failed their credit check."

With 9.7 percent (Bureau of Labor Statistics) of American workers currently out of a job and their bills mounting, Maria's story is becoming all too common. Dennis Nason, CEO of the recruiting firm Nason & Nason, says that long-term unemployment has created a snowball effect. "The longer one is out of work, the more [you] rely on credit and the tougher it is to make payments," he says. "If you are late the rates go up, banks cut credit and your score plummets even lower, making it tougher to find a job."

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According to Nason, employers are looking at credit reports to find patterns or destructive habits that would be a security risk or detrimental to the work environment. Nason explains that a credit score below 700 is a warning, below 650 is a concern and below 600 is considered a red flag. Although some employers try to look past the numbers, rigid company policy can prevent them from being sympathetic.

So what can a job seeker with poor credit do?


1. Understand your rights

Under the Fair Credit Reporting Act (FCRA), employers must gain permission to conduct a background or credit check. Additionally, employers must notify the job seeker if their credit score was the reason they were not hired. The employer must also report which credit reporting agency provided the information and provide a copy of the report so that the accuracy of its contents can be reviewed by the prospective employee.

Jordan Goodman, personal-finance expert and author of "Master Your Debt" explains that each credit reporting agency (Equifax, Experian and TransUnion) must provide consumers with one free report a year, which was mandated by the FCRA. "Spread them out throughout the year," says Goodman. "You cannot get your score for free, though, just your report." To obtain the free yearly report, go to annualcreditreport.com, a Web site maintained by the three nationwide consumer reporting agencies.

In two states- Washington and Hawaii -state laws limit the use of credit histories in screening for job candidates. And in July 2009 a bill was introduced, H.R. 3149: The Equal Employment for All Act, which aims to amend the FCRA to prevent employers from using credit checks in their employment decisions against prospective and current employees. The bill's progress can be tracked through congress via Web sites such as govtrack.us and opencongress.org.


2. Know where you stand

"Pull your own credit report when you're considering applying for jobs," says personal-finance expert Peter Dunn, author of 60 Days to Change: A Daily How-to Guide with Actionable Tips for Improving Your Financial Life. "If you're on top of your credit report, you won't encounter any surprises during interviews." Dunn also suggests being prepared in advance by knowing which job applications are likely to result in a credit check. "Nearly all federal, state, and local government employers will look at your credit status, as well as institutions/organizations (including nonprofits) that are at all regulated," he explains.

To keep an eye on your credit, Goodman recommends signing up for yearly service at guardmycredit.com, an Equifax credit watch system. The site allows you to look at your score in great detail and identify theft or inaccuracies, and alerts you when your score goes up or down.


3. Be upfront

When discussing your credit situation with a prospective employer, candor is always best, explains Dunn. "There's no need to apologize to a prospective employer for your problems. Don't whine or get defensive. Try to put yourself in the prospective employer's shoes. Would you hire you?" he says. Goodman also recommends an up-front approach. "You have to show how you handled the situation as responsibly as possible," he says. Most importantly, Goodman suggests, you have to make a case for your employment. "Show enterprise and make yourself unique and valuable," he says. "Really understand the company you are applying [to] and what you bring to the table that will make them better. Make it easy for them to say 'yes' and hard to say 'no.'"


4. Clean up your credit - quickly

Job hunters should scrutinize their reports very carefully and take care of any issues that may be negatively affecting their credit, according to Goodman. "Under the FCRA, consumers have the right to challenge derogatory credit--inaccurate or accurate--on their report," he explains. "The original creditor has 30 days to respond, and if they don't respond within 30 days, it goes off the report."

Although a poor credit rating may seem beyond repair to frustrated job seekers, Dunn suggests the following steps to improve your score quickly.

1. Get current on your bill and credit card payments.

2. If you are behind, call your creditor(s) and work out a payment plan.

3. Do not ignore your bills-especially those in collection.

4. Here's an incentive: just two months of making your payments on time can improve your score by 20-30 points.

*Name has been changed to protect identity.

Next: Is a Bad Credit Rating Preventing You From Landing a Job? >>



Based in Seattle, Thea Nyberg is a freelance writer and editor.


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202 Comments

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kpenna

no credit, no job, force to apply for welfare! I thought we were suppose to be helping people out instead of putting them down! My son served 14 plus yrs in the Army as military police & was honorable discharged in 2012. He has been turned down for jobs do to questionable bad credit report. What a way to treat your veterans. How in the hell are you to pay your bills if NO job?

November 15 2013 at 7:35 PM Report abuse rate up rate down Reply
Jj Neufmois

How the hell are these tips at getting a job with bad credit?! This is only telling us what we already know for decades! And it's really starting to piss me off how none of us here can't get a job because nonsense like this exists in the US. I don't care what anybody here has to say; this is discrimination whether if you think so or not! Just because you have late payments or some outrageous hospital bill, doesn't make you a thief. If the employers are so worried about theft, then they would've have everyone on surveillance rather than waste time and money on garbage nobody but creditors/lenders, bankers, and debt collectors care about. Someone better come up with a better tip than what's stated above, otherwise stop wasting our time!

May 25 2013 at 9:55 PM Report abuse +1 rate up rate down Reply
Zohan James

Yeah this is bullshit! I am getting so sick of this country and I am a native born American. Listen, when you barely make enough money to eat, feed your family, provide for yourself etc. It's only in the natural order of things to not be able to pay your bills accordingly and as you would like. GOT DAMNIT! Im so sick of the oppression!

January 17 2013 at 12:22 PM Report abuse +2 rate up rate down Reply
Max Fischer

The fact of the matter is, most jobs worth their weight are going to look at your credit rating. For me the best solution was to hire Lexington Law and get the problem fixed quickly and easily. They were real professionals, and it really got me quickly back on track. Hope that helps...

December 19 2012 at 3:23 PM Report abuse -1 rate up rate down Reply
Head Banger

i agree with these people credit shouldn't play a role in getting a good paying job; we have bad credit because it's companies like you that wont hire a person because of their credit so that is why they have bad credit!!! You morons!! I think people should write to their local congressmen about this credit checking to get a job or career to do away with it! Credit checking used to only be used for buying vehicles and houses but it has overgrown into an overwhelming monster because of some idiot who decided to come up with an idea to check people's credit before they hire them. I think this person should be run out of America!!

November 01 2012 at 2:03 PM Report abuse rate up rate down Reply
Rick

How are these so called "tips" helpful and more importantly why should a person's credit rating be used as a tool to determine if a person is hired or not? After over 22 years with one employer, due to a corporate reorganization and subsequent downsizing I have been out of work. My once very good credit rating is now poor. Over the past three months I have been offered two jobs but both were contingent on background and credit checks. The background checks came back clean. However, due to my now poor credit history, I could not pass the credit checks and as a result both job offers were rescinded. As others have pointed out, it's a Catch 22 situation. You loose a job and without the source of income your credit rating suffers. You cannot catch up on your bills to improve your credit rating because you need a good credit rating to get a job.....How does someone's potential job performance have anything to do with their recent credit history? I suspect there are many white-collar criminals behind bars that had very good credit histories.

October 25 2012 at 3:24 AM Report abuse +1 rate up rate down Reply
QueenB

WHAT? Are you stupid? The whole point is YOU CAN'T GET A JOB PAYING ANYTHING to make it possible for you to pay your bills!!!!!!!! I agree with Faith! These "helpful hints" do NOT help at all. Here's the truth: if the credit report does not have information that proves you CAN'T do the job, are NOT qualifed or "disproportionately negatively impacts certain minorities, IT IS A PROHIBITED PRACTICE that the EEOC frowns on!!! Check out this site: http://www.eeoc.gov/laws/practices/index.cfm, Prohibited Employment Policies/Practices

August 13 2012 at 6:36 PM Report abuse rate up rate down Reply
Faith

These are some of the most ridiculous "helpful hints" I have seen. If you have bad credit does it matter to know more about it. If you have bad credit, companies will not hire you, you can explain until your blue in the face. If you can't find a job how in the hell are you going to clean up your credit "quickly". Knowing your rights does not help, if you refuse to sign the release they simply do not take another look at you. How about being a little realistic. How about offering some useful advice instead of the same nonsense everyone else says.

May 22 2012 at 11:50 PM Report abuse +3 rate up rate down Reply
Reube Liny

It should be illegal to use a credit-rating check for employment.

I avoid debt, and have no loans from anyone, therefore I have a low credit rating because I have no debt to make payments on. I refuse to take on debt as a means to employment.

And for those who have bad credit due to falling behind in payments, that should have no bearing whatsoever on one's ability to secure a livelihood in employment.

We need to speak out out more on this and get Congress to address this highly unethical practice. We need legislation which makes it illegal for employers to use credit rating during a job interview process.

May 07 2012 at 10:42 PM Report abuse +4 rate up rate down Reply
Cyndie B.

BTW...thank you Teslin for your comment. I'm going to look into that!

May 04 2012 at 10:35 PM Report abuse rate up rate down Reply

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