July 15, 2008 12:42 PM

Job hunting with bad credit
Posted by Jesse Nunesat 12:42 PM

Don't think your bad credit can affect your ability to get a job?

Think again.

As more and more Americans struggle with the faltering economy, rising gas prices, and inflation, there are many opportunities for someone living on the edge of credit health to take a dive into dept.

Add that to the continuing trend of companies cutting jobs and benefits (GM is the latest large US company to announce a paring of workers), and is seems the conditions are ripe for having a lot of unemployed workers struggling to pay the bills, all while looking for new employment. And it can create a sort of catch-22.

That's because some employers check a candidate's credit history before hiring them.

In a recent Bankrate article, Steve Bucci, "The Debt Advisor" columnist, took a question from a reader who lost a job offer because of bad credit. Besides working hard to improve your credit score and pay off debts (which can be difficult if you have no job to begin with), Bucci tells the reader that the only other recourse is to be as up-front as possible with the company you're applying to about your credit problems. Bucci writes:

You are on the right track to mention your past credit troubles when you are interviewing. As luck would have it, my brother Jim Bucci -- the HR guru from Availity (a medical software company) -- is currently visiting me. So, as I was grilling some burgers, I was able to grill him for some insight.

"By volunteering information about a difficult situation or period in your past, you may improve your chances of getting hired," he says. "Companies always look for as many indicators of success as they can when making a hiring decision. Your ability to admit to a past problem and show a positive plan to correct it can count as points in your favor."

A proactive approach may give you a better chance of remaining in the "potential candidate" stack rather than being filed in the trash can.

For my readers who see a layoff coming or plan to look for a higher-paying job in the future, remember to start the credit review and dispute process as far as six months in advance to allow time for corrections to show up.

Bad credit can not only impair your ability to get a job, but it can also affect your chances at moving up the ladder at your existing job because some companies run credit checks when considering candidates for promotions, writes Monster.com finance career expert Dona DeZube. In addition to checking your credit report for problems before it lands on the desk of a career decision-maker, DeZube offers tips for addressing your bad credit with your potential employer. Here are a few:

Get Your Story Straight

What can you say when you're asked about poor credit? Your best bet is to keep your answer short, sweet and sincere. Acknowledge the error of your ways. Assure the employer that there was a one-time problem and you've changed. For instance, you might say: "I came from humble beginnings, and when I went away to college, I'd never had any experience with credit. I got overextended, and that was wrong, but I learned a lesson and worked hard to pay off all my debts. Since then, I've had clean credit and I hope this won't hold me back, because I really want to work for your company."

If you are turned down for a job because of credit problems, the employer has to give you a copy of the report and explain your rights under the Fair Credit Reporting Act.

Don't Trip Up

There is one other way a credit report can trip you up. When you apply for a new credit card or loan, you provide information about your current employer. That information is passed along to the credit reporting service. If you leave a job off your resume and it appears on your credit report, someone may notice the discrepancy. That's another good reason to pull your own report from all three companies before you start interviewing.

Is It Fair?

If you have poor credit, you're unlikely to agree with employers who think good credit is important. Instead of beating your head against the wall, try applying for work with smaller companies where the hiring process isn't standardized and there are no professional human resources folks to suggest credit checks.

So, are you worried about your credit score affecting your ability to get a job? Has it already? How do you plan on overcoming bad credit when going through the job search process?

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