Wednesday, May 28, 2014

How Your Credit Score Can Affect Getting a Job

Written by Lauren Lind 

Many people aren’t aware that your credit score can affect you in your job search. Depending on the State Law, an employer can in fact check your credit score.  As of July 2013, according to the Colorado Department of Labor & Employment, Colorado is one of the states that strictly limit the circumstances in which employers may use credit reports in making employment decisions. An employer may require applicants and employees to authorize the employer to view their credit reports if the employer is a bank or financial institution, or is required by state or federal law to use credit history for employment purposes. The limited circumstances include a situation where the job involves a contract with the federal departments of defense, intelligence, national security, or space.

Employers may also use credit information if the job is an executive, managerial, or officer position (or professional administrative staff to such positions), and involves at least one of these duties:
• Setting the direction or control of a unit, agency, division, or the entire business
fiduciary responsibility to the employer
• Access to the financial information of customers, employees, or the employer (beyond the information routinely provided in retail transactions), or
• The authority to enter into contracts, collect debts, or issue payments

If you fall under these exceptions or live in a state where employers may use your credit score freely in the hiring process, then you need to be aware of the following:

• Employers might consider you a liability. It is very possible that the employer will correlate your struggles with your credit and home situations with projected ability to be present at work.

• This could be the deal-breaker between you and your competition. If your competitor’s credit score is good and your score is in the dumps then you automatically knock yourself out of the running.

• Bad credit sends you on a downward spiral. It gets exhausting trying to keep up with previous bills after being unemployed. It becomes harder to gain employment, even though you may be qualified in every other area.

• You can say goodbye to a job in finance until your credit is in the clear.  The reasoning for this is fairly simple, if you cannot handle your own finances, what would make the employer believe you could handle anyone else’s finances?

Luckily, since we live in Colorado, your credit score cannot legally be used against you unless you fall under the specifications listed above. Employers want to be able to trust you and believe that if you have a long-term good credit standing, it will relate to your reliability.

Hat tip: Colorado Department of Labor & Employment