If finding a job in the current economic climate wasn’t difficult enough, job seekers have one more potential roadblock on the way to securing a new position: their credit file.
Based on a recent survey, up to half of employers eliminate potential job candidates with low credit scores. Though some 20 states have introduced recent legislation to limit employers’ use of credit reports, employers still are allowed to check prospective employees’ credit files as long as they get their permission.
Hiring managers claim poor credit raises a red flag. Some believe these candidates may be at greater risk for theft from the company or bribery from outside sources. Others feel financial problems may indicate a lack of responsibility, inadequate judgment or questionable character.
According to recruiting experts, here are some red flags on your credit report that could cost you a job:
• Liens — show that you haven’t responsibly paid off debt or negotiated a settlement
• 100% Credit Utilization — indicates you’re in over your head and can’t stick to a budget
• Bankruptcy/Foreclosure — suggests you bail on large projects or lack long-term visibility
• Recent late fees — signal financial stress or trouble budgeting
• Significant Activity — frequent opening or closing accounts shows you’re desperate for cash or aren’t good with money
Recently, some government officials have stated that checking potential employees’ credit reports is unfair, particularly in light of the recent recession. However, the practice is unlikely to change anytime in the near future.
If you have concerns about your credit score and that it may affect your chances of obtaining employment, visit www.vrtmg.com/lfigueroa for more information.
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