9 tips for job seekers with bad credit
By Lisa Rogak
As the recession drags on, the unemployment rate continues to climb among people across the economic spectrum,
as do foreclosures and bankruptcies. To add insult to injury, more employers
are running credit checks on potential employees as a standard part of the
The good news is you can still find a well-paying job even if you have lousy credit.
Paradoxically, 'fessing up to past credit mistakes may even provide a chance for
you to soar above other applicants in the eyes of your future boss.
Here are some ways
to improve your chances of finding your next job despite past credit dings.
1. More employers run credit checks on job applicants. Credit reports are a critical part of the hiring process in industries where employees
-- from bank tellers and armored-truck drivers right on up to accountants and chief financial officers -- routinely handle significant amounts of money in the course of their
days. In industries where this isn't the case, an employer may still run a credit check to help determine what kind of employee a candidate will be, since
a good credit history can provide a glimpse into a person's character and
level of maturity. "Someone who pays bills late, has had accounts turned
over to collection agencies or who's declared bankruptcy is rightly or wrongly
considered to be someone with a lower degree of integrity," says Susan Wilson Solovic, author of "Reinvent Your Career: Attain the
Success You Desire and Deserve."
2. Be the
first to bring it up. A credit check usually happens after the first
interview -- an employer wouldn't invest the time and money unless you've
cleared the first hurdle -- although occasionally the first time you'll hear
about it may be when you're offered the job. In either case, get busy. "It's
best to tell an interviewer about your credit history as soon as possible,"
says Dianne Gubin of Tech Exec Partners, a
staffing firm in Calabasas, Calif. "The
more that you reveal upfront, the more likely that you will continue with the
interview process." Your disclosure should go well beyond your credit
history. "Besides credit issues, I also advise candidates to tell an
interviewer about anything else that might come up on a background check," she
adds. Kimberly Schneiderman, a New York-based job search consultant, agrees. "Employers will see that you have the integrity to own
up to a potentially embarrassing situation, and it will also point favorably to
your forthrightness and honesty, which are two highly regarded attributes in
most jobs," she says.
3. Demonstrate a strategy. Once you've revealed the true state of your credit
history to a potential employer, it's time to show the actions you're actively
taking to improve your credit, from paying down debt to refinancing your
mortgage. Solovic suggests you go one step further and bring
your own copy of the credit report to the interview. "This clearly shows that
you're not trying to hide anything," she says.
4. Have an explanation ready. If your
credit was damaged due to personal reasons and not irresponsible behavior, that
may help you get a pass. For instance, if you or a family member were out of
work for an extended period, or your unemployment benefits ran out, a
potential employer may overlook a poor credit history. Likewise, if a medical situation caused your credit to
deteriorate, whether it involved you or a family member, an employer may
Someone who pays bills late, has had accounts turned over to collection agencies or who's declared bankruptcy is rightly or wrongly considered to be someone with a lower degree of integrity.
Susan Wilson Solovic
the company and the job. If you
don't want your credit report to determine your potential as an employee, avoid
those employers that rely on them as a matter of course. It's a given that
state, federal and local governments will automatically pull a credit report
on a future employee, especially if the position requires a security clearance;
any company that contracts to do business with the government will likely do
the same. However, some companies that pull credit reports on prospective hires
do so only for jobs at midlevel management positions or higher. On the other
hand, even the lowest-level job at some firms may require a credit
check. "If a business is regulated in any way, such as a nonprofit,
it'll be more likely to run a credit report," says David Couper, a career coach
in Los Angeles.
Target smaller companies. Small businesses with only a few employees and
companies with high turnover are less likely to run credit checks on future
hires. They don't have the time or the resources.
7. Rely on
personal connections. Restrict your job search to networking with people
who know you -- and vice versa. If you already have a relationship with a
potential employer, she may be less likely to consider a good credit report as
a condition of employment. "Receiving a recommendation from a friend or colleague
of the employer will help you create a positive impression," says Couper.
8. Stress why you
are the perfect candidate for the job. "If an employer believes you are the best
match for the job, he may be more tolerant of your credit issues," says Couper.
"If you're able to prove what you can do for the company and that you're
head and shoulders above the average applicant, you may be given some
9. Apply for the job anyway. While some companies draw a line in the sand and automatically reject all
potential employees with poor credit, others take a more laissez-faire approach, which is
almost impossible to research in advance. When Connie
Thanasoulis-Cerrachio, a career coach and former head of staffing for Merrill
Lynch Investment Managers, discovered that a promising candidate had credit
issues, she didn't automatically dissuade him from continuing to interview for
the job. "He explained how he got into his mess," she says. "If his explanation
wasn't a good one, we probably wouldn't have hired him." She believes that
sometimes bad things happen to good people.
that case," she says, "I like to give the candidate the benefit of the doubt
and proceed anyway, because it depends on the job, the explanation and the
overall honesty of the person."
See related: Help for bad credit, More employers run credit checks on job applicants, Better credit can mean better job prospects, Credit checks for job applicants become more common, Reduce unemployment benefit card fees
Published: July 22, 2009