Can a Poor Credit Rating Keep You From Getting That Dream Job? You Bet!

Over the past three years, millions of Americans have found themselves standing in the unemployment line at one time or another. Many companies have outsourced jobs overseas. The common myth that most of these positions are manufacturing jobs is no longer true. Many of the positions that are now being outsourced are high paying, white collar positions. This in combination with a downturn in the US economy has made finding a new job difficult.

 

This set of circumstances has been combined with huge losses by companies that were previously thought of a bellwether stocks, sending their prices plummeting and leaving their shareholders with, in many cases, no savings to fall back on.  What better set of circumstances for consumers to get overextended financially?

 

Unfortunately being overextended and, perhaps, behind in paying your credit obligations could make it nearly impossible for you to find that next dream job. And for good reason.

 

For many years now, many large corporations have checked the credit records of people that they are considering for employment. Originally, companies conducted background checks inclusive of credit records for sensitive jobs – in many cases these were positions that dealt with the company’s finances. Over the years, these policies changed to include more and more employees until now, in much of corporate America, every single employee hired by a given company will have their credit checked.

 

Now, many small and mid sized companies have also jumped on the band wagon. The reasons are many but they boil down to a few very simple things.

 

First of all, just by announcing that it will conduct a background check, companies discourage people from applying for jobs that they are not qualified for. They also discourage those who have criminal records from applying (these account for nearly 10% of the people looking for positions). This saves both the company and the hiring manager time and, in the long run, money.

 

Secondly, people lie on their resumes and companies know this. In fact, as many as 30% of all resumes contain lies that are material to the job being applied for.

 

Just given these statistics, it is actually a wonder that not all companies conduct these checks.

 

Just because you haven’t lied on your resume, and you are not a criminal, doesn’t mean that you are out of the woods however. Many background checks include a credit check.

 

When employers look at your credit, they can get a lot of information about what kind of a person you are. About your character. Do you pay your bills on time? If the answer is “yes” then one can surmise that you take your obligations seriously. Have you had your wages garnished to pay taxes, child support, or for some other reason? If the answer to any of these is “yes” then your prospective employer may come to a very different conclusion about you.

 

The fact is that employers don’t want employees that have credit problems for a variety of good reasons. If you are focused on your financial problems at work, then you are probably not focused on the work your were hired to do. You may also be tempted to steal.

 

If you think that you are the only one worried about having your wages garnished, you are incorrect. Employers don’t like this either. It means that they have to establish special procedures to pay you, which takes time and costs money. And if the employer messes up a garnishment, then it is the employer who is liable. Legal issues are not something that employers want their employees to cause.

 

And if you are the subject of active collection issues, you may have a real problem finding a job. Employers hate having collection agencies call their offices. They find it even less attractive when process servers show up on their door to serve legal papers.

 

The bottom line of this is that if you have poor credit and are looking for a new job, you could be in real trouble.  In certain jobs, getting into financial trouble can even be the cause of you joining the unemployment rolls. For instance, the armed forces will discharge people who can’t pay their bills. Likewise, getting or keeping a security clearance for either civilian or military work, is next to impossible if you have credit problems.

 

If you are in this position, there are things that you can and should start doing.

 

First of all, don’t ignore your payment obligations or collectors.

 

Secondly, get on a budget and stick to it. This means you may have to give up that next vacation or that new TV. In the long run, you will be much better off.  When you prepare your budget, list out all of your expenses and then eliminate the ones you really don’t need. For instance, you have to pay your rent. On the other hand, having 200 channels of cable TV is probably something that you can do without.

 

And if you think that little reductions in cost don’t matter, think again. If you are able to save just $3 per day, over a 35 year period at 5% interest, you can save over $100,000. That’s the cost of a pack of cigarettes.

 

Initially, take the money you save and pay your bills. Then start socking that money away. Eventually, you’ll be able to take that vacation, purchase that TV and not have to worry about paying your bills. You’ll also make yourself a lot more attractive to potential employers.

 

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