Bad Credit Can Spell Job Search Woes
Dona DeZube | Monster Finance Careers Expert
Is there something personal in your financial past that you’d rather not explain to a stranger — say bad credit, bankruptcy or a proclivity for spending thousands of dollars on lingerie at Victoria’s Secret? Then applying for a new job or going after a promotion could put you in a tricky spot, because an employer can easily find out about all of these things.
Many companies check job applicants’ credit as part of the background check. Some also check credit histories when employees are considered for promotions, so you can’t assume that because you have a job at the company, your personal information is going to remain personal.
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Before a potential employer can pull your credit history, you must sign a release. The report the company gets will be just like a regular credit report, but some credit services, such as Experian, remove information employers aren’t allowed to consider — such as age and marital status.
What is going to show up? Delinquencies, bankruptcies, judgments, liens and a list of your loans, mortgages and credit-card accounts — this is where your underwear preferences can become fodder for the office gossip hotline. If you open a charge account at Victoria’s Secret and spend $1,000 a year there, that line of credit will appear on your credit report.
Find out what’s in your credit report before you start your job search. Obtain a copy of your credit report from each of the three credit services – Equifax, Experian and TransUnion – so you’re not blindsided by an inaccurate item that you don’t know about until an interviewer asks. Under an amendment to the Fair Credit Reporting Act, you can access your credit report for free once every 12 months.
If there’s a mistake on your report, contact the creditor that made the error, clear it up and ask that agency to report the mistake to the three agencies. If there’s adverse information about unpaid student loans, charge-card bills or bankruptcies on your report, don’t waste your time and money on credit repair schemes. You can’t erase the truth from your credit file. But time heals all wounds; most bad credit incidents will disappear from your record after seven years.