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Was there a time in your life when you underwent a financial fiasco that you’d rather keep to yourself?

When you barely had a grip on your monthly dues because of some overspending made in luxurious boutiques using many credit cards? When you juggled how to pay all the credit cards used that some reached bad credit status?

Just when you thought these acts go unnoticed, you start applying for a new job or promotion and poof! You were asked about your credit history and you don’t know what to say. You hadn’t realized that bad credit records will affect your chances of a new job or yearned promotion.

Most companies include the applicant’s credit history as a part of a background check.

A simple explanation is that, how can they hire or promote a person whose job is to keep/manage other’s money or finances if he/she alone cannot discipline his/her own money handling. How can they trust an employee who suffers from financial distress over mismanaged funds?  

The question is – can you escape the ghosts from your past by not disclosing information about your credit history? Will it affect your career as well as my chances of getting a new job?

Can we add a credit score to the list of pre-employment and employee criteria?

No. Generally, credit bureaus aren’t allowed to disclose your credit score with an employer as subject to State Laws.

However, they may seek your assistance to see your credit report which you may tend to cooperate if part of a pre-employment requirement.  

When you grant the request, the credit bureaus will send a filtered credit report specifically designed for the employer’s checking purposes. It means that they will not wholly divulge all the credit information but limit it to only the most useful information or a regular credit report.

Where are my privacy rights?

Yes, employers are allowed to do credit checkings protected by the Fair Credit Reporting Act, but, they cannot directly go to the credit bureaus and transact.

They will first need your authority that you allow them to do so, usually in writing. Of course, you can refuse if you don’t want to, but take the risks of not getting the job or promotion you’re applying for.

How can it affect me getting my dream job?

If the employer’s checklist of requirements includes the credit background checking, you cannot do anything but comply if you badly wanted the job.

On how will it affect you depends on your own credit history if it is responsibly handled or not. You need to understand how your credit scores are important for the dream job and position you want to land.

a) Credit records show your management skills

How you handle your finances reflects how responsible you are to handle duties and obligations. If bills are paid on time and finances are excellently handled, you appeal as an organized employee and therefore fit on managerial positions. This proves that you know how to plan and balance your daily living, and you are capable to meet and deliver jobs on the deadline.

b) Trustworthiness is important for organizations

Having a good credit history is a way of showing your employer that you are a trustworthy person, especially if it reflects that you are capable of handling large finances such as being able to pay a large loan or mortgages.

This trait is most important for human resources job positions where employees deal with the company’s confidential information. It’s because this job is responsible for safekeeping information about the employees’ salaries, medical files, personal information, and disciplinary actions.

c) Credit problems can translate to personal problems 

Un-organized credit handling could also reflect possible personal problems at home that may affect job performance. This is not to discriminate because we all know that everyone deals with personal problems at home, but financial matters do not come and go that easy, so it could seriously impact an employee’s productivity.

For an employer, it is a warning for potential future problems and dishonesty issues if you weren’t able to manage your finances that resulted in a negative credit report.

d) Certain industries prefer not to get involved 

The good thing here is, the criteria of an employer with regards to your credit standing varies depending on the company industry. Some companies may not put much emphasis on credit histories as it has no direct effect on a job you will be assigned.

However, some industries put much emphasis on your credit history as their criteria.

Financing institutions are one of those highly sensitive to your credit records. It is an integrity issue if you have mismanaged funds under your credentials.

Since financial institutions deal directly with money and funds, it is highly exposed to fraudulent financial activities. It’s hard to build your credibility that you will not be tempted to commit dishonesty in the future.

Some banking institutions automatically reject you in the position once they discover poor or failed credit standing.

To hire or not to hire

Aside from weighing you and other applicants in terms of your skills, educational attainment, abilities, and character, another deciding factor on who they will choose is who has a better-than-average-credit report.

If your skills and personality matched with another applicant eyeing in the same position you pursue, the employer will look for other factors to justify who they will choose.

And it’s possible that they feel safer in choosing the one with an acceptable/excellent credit history report as against the one with past or current financial struggles.  So in the end, your credit history could be tie-breaker among other applicants.

At the end (when asked about)

Honesty is the best policy! Do not be afraid to let the employers know your credit history. I

n the end, maybe if your credit standing resulted in only a few immaterial (at the employer’s point of view) past dealings, they might still consider you in the position. It is just a matter of thoroughly explaining how it happened and most importantly, how did you fix the problem.

Written By
Erin Fiddler is an online financial consultant for Cash Mart. She works in financing for over 5 years and is an authority on emerging financial services. She also writes on trends in the industry such as consumer lending loans, stock investing, and retirement plans.

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