How to Apply for a Job With Bad Credit

                                

Credit scores are used by employers to screen applicants. Traditionally candidates applying for jobs with the police or fire department, government agencies, finance or banking industries only performed credit checks. Now most companies perform credit checks. 

A candidate can ask that their credit report not be pulled but this will raise an eyebrow and probably disqualify you from being considered for the job because the employer will feel you have something to hide. If you know you have bad credit notify the employer upfront and tell them what you are doing to restore your credit. 

Employers look at bankruptcies, foreclosures, tax liens, multiple bounced checks, divorce, driving violations and medical bills because they assume that a candidate with bad credit or money problems will not be able to perform the job or can easily be bribed.  

Credit checks can judge candidates unfairly because you don't know the reason a candidate hasg bad credit. Some employers feel that if you have bad credit you will not be a trustworthy and dependable employee, i.e. you may arrive to work late, be a lazy employee, borrow money from co-workers, spent money irresponsibly, your attitude, credibility, integrity, etc.

Credit checks can disqualify certain groups of people such as recent college graduates, employees with 1-3 years experience, low-income employees and the elderly because their credit scores may not accurately reflect how they will manage their money in the future.  Here are 5 ways to apply for a job with bad credit.

1. Applicants should be aware of their credit score and try to get the highest score possible prior to applying for jobs to increase their chances of getting hired, especially if the hiring company states that they will do a background check. It is better to be proactive and let the company know upfront than to wait and have the company find out on their own. By telling the company upfront you appear more trustworthy and honest as opposed to not saying anything which makes you appear deceitful and untrustworthy.
2. If you have bad credit and cannot get your credit problems fixed in a short amount of time you might have a better chance of getting hired by a smaller company who may not have the same resources and budget as larger companies to perform background checks. Check the law in your state to determine if credit checks are performed as a part of the employment process http://www.ncsl.org/research/financial-services-and-commerce/use-of-credit-info-in-employ-2013-legis.aspx. Here are 4 ways to apply for a job with bad credit.
3. Order a copy of your credit report from the 3 major credit bureaus - Experian, Equifax and TransUnion at www.annualcreditreport.com or call 877-322-8228. You can also check court records, do your own background check (look in the Yellow Pages under "investigators'") to get an accurate view of your credit history and outstanding debt.
4. Wait about 3-6 months before applying for a job if you have bad credit to allow enough time to address issues on your credit reports to help increase your credit score.
5. If you are not hired for a job and feel it was because of your credit you can ask the employer what credit bureau they used and order a free copy of your credit report. A background check can include viewing your credit report, bankruptcy filing, criminal records, court records, drug tests, driving record, and other information. Federal Law prohibits an employer from refusing a candidate basis solely on their credit or because they filed for bankruptcy (FCRA 11 USC §525) but it can be used as a factor in not hiring a candidate. The Fair Credit Reporting Act (FCRA) sets national standards for employment screening but the law only applies to background checks performed by "consumer reporting agency". The law does not apply to employers who conduct background checks in-house.

Always know your credit score, it can mean the difference between being fired or getting the job and salary you desire.

Bad Credit May Not Affect Employment

The current unemployment rate is 9.7% and the economy gained 431,000 jobs in the month of May. This is promising although many Americans who are trying to find employment had to take drastic pay cuts or continue to remain unemployed. With the federal minimum wage at $7.25 any job looks promising right now.

The competition is stiff; those who made $100,000 or more are competing for entry or middle level jobs or jobs that are usually slated for college students accepting pay of $50,000 or less. Some Americans are working multiple low-paying jobs to try to make ends meet. Others have just given up looking for work altogether.

If you have bad credit it is a major factor that will determine if you get hired for a job or not. Having bad credit makes it difficult to get a job nowadays. If you know you have bad credit it is best to be upfront and let the potential employer know. Also, let them know the reason why you have bad credit and how you plan to fix your bad credit.

Many employers are no longer looking at just your resume, your interpersonal skills or your attire, if you have good credit and do go on the interview you have a better chance of getting hired than someone with the same qualifications and bad credit.

Previously when looking for a job, credit history was not a factor but recently due to the recession employers are scrutinizing candidates even more using credit as a factor for employment. Many industries are looking at your credit history including government agencies, police, fire department, banking industries. Many candidates do not realize that their bad credit will prevent them from getting a job or in some cases get them fired from a job.

It seems unfair that a company would simply disregard your experience, personality and interview skills simply because you have bad credit. Companies should focus on what you have to offer and not the mistakes you made or circumstances that affected your personal life and credit history. Employers see having a bad credit score as a reason to commit fraud or take bribes. In a few minor instances this may be the case, but overall Americans just want to work and pay their bills.

Since hiring can be discriminatory, one way companies can discriminate is by using credit scores. However, employers cannot refuse hiring you simply because of your credit but that is not always the case. Federal law prohibits this practice but there are really no protections in place to help candidates who have proof of companies who violate this law and usually can't afford to hire a lawyer to help them win their case in court.

Many Americans have complained about this practice and their complaints were heard. Nineteen states 19 states including Pennsylvania, Hawaii, Washington, Ohio, California, and the District of Columbia and South Carolina are considering passing legislation to prevent companies from using credit as a factor in hiring candidates for employment. Only two state legislatures Oregon and Illinois passed the law.

However, a win for consumers is that many credit card companies are banks are not weighing credit scores as much as before because the FICO score can make a mistake and classify a consumer as a bad risk when they are a good risk. Companies are now realizing what consumers knew all along, that the FICO score system is flawed and needs to be revised to accommodate the new credit card laws and current economic situation. Contact your congressman to demand states stop this unfair practice https://writerep.house.gov/writerep/welcome.shtml.