Is bad credit affecting my ability to get a job?
This question was recently posed to me to a member of Linkedin that I share a group with. I decided to post the question and my response here as I figured that many job seekers are probably wondering the same thing.
Question:
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Hi Dan-
I came across one of your blog posts in Project: Get Hired on LinkedIn and was hoping you might be willing to answer a couple of questions that relate to my job search.
At what point do recruiters conduct credit checks during the vetting process?
I’m reentering the workforce after three years trying to get my own business off the ground (it was incorporated and everything). Unfortunately, I wound up like about 95% of other startups–in the red and in debt. My personal credit rating has taken a pretty bad hit and I’m concerned it’s affecting my ability to get hired. I’ve even started mentioning it in my cover letters with a brief explanation and how it’s been a learning experience (which it has).
Nevertheless, I am not getting calls for interviews for jobs I am well-qualified for. Could my credit dings be hurting me before I even get the interview? How would you suggest I deal with a poor FICO score with prospective employers? Don’t mention it until they do or be upfront about it? I would appreciate any feedback you’d care to provide. Thanks!
Signed,
Getting Desperate
PS This is what I’ve started adding to my cover letters in an effort to address my poor credit upfront; my job-seeking focus is currently in the nonprofit sector: “I spent the past three years running my own business. One of the many things I’ve learned is that I am at my best professionally when working in service of others. My credit rating took a beating as a result of my entrepreneurial efforts, but please don’t hold that against me. I have learned and grown a lot from the experience. I am ready to get back to work in a capacity that will enable me to apply my ******** talents and organizational skills in what I’m sure is a dynamic, high-energy environment.”
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Answer:
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I have never heard of a recruiter running a credit check before deciding on who to interview. In fact they cannot because they need you to sign a release before they can run a background check. Background checks are done usually at the time a company has decided to extend an offer. In fact, most times it happens right around the time when a verbal offer is extended. At the company that I work for, we run background checks after the verbal offer is extended. The offer is always conditional and we have verbiage in the offer letter that clearly states that the offer is contingent on the successful completion of a background check.
I would not include that information in your cover letter. You may be doing more harm then good. In my experience credit checks are usually not a part of the background checking process for most companies. The exception is if they are providing a corporate card. If that is the case, the actual card company runs the check and not the company. This is very rarely a condition of employment.
In short, I would not really worry about it.
Best of Luck,
Dan
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I would love to hear from some other recruiters out there. What are your experiences in this area? Please share your career advice in the comment section below.
I think this very useful advice. I have the same question asked to me. Dan thanks for clearing this up for people. I’ll add this post to my FB group etc, Because this can sometimes be an embarrassing question that a lot of people want to know but don’t want to ask.
Dan, I can assure you that in most states, a poor credit rating is very likely to be holding you back in getting a job. But it depends on the state. Some have outlawed the practice and won’t even allow you to sign a “voluntary” forfeiture of your right to privacy. It is a form of discrimination in the same way that refusing to hire someone who has been unemployed for more than 6 weeks is a form of discrimination. (There’s a movement afoot in Washington, D.C. to get that declared illegal, too.)
Hawaii is one of the few states that has outlawed credit checks in all but a very few jobs where handling large sums of money would be a part of the job description. Many other states are also attempting to get such a law passed. I wrote a blog about this practice last year called, “No Shirt. No Credit. No Employment.”
If you’d like to read it, you can find it at:
http://bizbitchblog.blogspot.com/2009/11/no-shirt-no-credit-no-employment.html