I’ve received several e-mails from people whose credit is being impacted by the recent financial crisis:
I have a small trucking co. that is doing really bad right now because of fuel costs and slow shipping. It looks as though I am going to have to file bankruptcy as I am in way over my head at this point. All of the loans were in both my name as the company’s name so it will be a personal bankruptcy. This company was my dream and I left nice corporate job to pursue it, I just couldn’t predict the economy would take this kind of toll on me.
I am not a dishonest person and I do have morals, but I can not pay these business debts back with a normal salary. I have a good work history from retail to logistics management in a big company.
How would you feel about this situation?
And
My husband is being considered for a new job (in banking). He is going into his 3rd interview, but concerned that in the end his bad credit history is going to kill his chances. The bad credit is from a previous divorce (which he has noted on the report).
Should he let the HR person know at this time, or wait until asked to release the info?
These are just a sampling of what I have received too. Many people have been directed to my blog looking for resources on how to deal with difficult employment issues. And if it isn’t difficult enough dealing with trying to search for a new job in this rough economy, it is unnerving to think that something from your past (like a bad credit history, divorce or bankruptcy) can derail you even further. I wish I could give you a big hug but I don’t really do that. Remember, I work in HR. So maybe a compassionate handshake (with two hands) or a handshake while patting the shoulder will have to do.
Can bad credit hurt your job prospects? The answer is a resounding (and often unfortunate) yes. Credit history is considered (along with a host of other factors) for quite a few positions these days. I don’t agree with the breadth that some companies have used to determine whether or not the criteria for a position should take into consideration your credit history or not. And there is no hard and fast rule to when it is appropriate to use and when it isn’t.
What is often good news for one party is bad news for another. For the first question, your credit will probably be less of a factor than many positions. That doesn’t mean it won’t be considered but I think it should be less of a factor. What I would be more concerned about is the hiring manager asking why your business failed and why they should hire someone for that position when they couldn’t get it done on their own? That may be harsh advice for someone who is on the brink of losing their dream business but I think you need to seriously sit down and think about your answers to those questions before your first interview. I am guessing that how you answer those questions will be far more important than your credit history.
Remember that part about the bad news? If your husband is going in to interview for a position in finance or banking, I am guessing that his credit history will be scrutinized much more than other positions would. That doesn’t mean he will be passed up because of a poor credit history but that he should be much more aware of this possibility. My advice is to be upfront and not give your possible future employer any surprises. A good time to address this is when he is filling out an FCRA (Fair Credit Reporting Act) disclosure and release because they will have to get that release before they can run a credit report on him and it brings up the subject in a less awkward way. The important part isn’t how you bring it up though, the important part is that your husband exudes confidence that things are looking brighter and that nothing else in his history suggests otherwise.
Ultimately, my question goes back to how fair and necessary are credit reports to the hiring process? And in times of economic turmoil, do you think employers should ease up on credit requirements?
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Lance – great answers to some tough questions!
Wow.I didn’t know how much your credit could hurt my potencial employment. I have gone through meny job potencial also. But on one has hired me. I have lost my job 09/05/2008. termated. called me up and told me this and did not tell me why. no write ups, no verble warnings. I know california is an at will employee state but geesssss. What is going on? Quantum services didn’t even alow our legial amount of breaks, never recorded them, And because of them firing me , I have found it even more difficult to find a job. What now?
I went into debt to go to school and this same debt (including credit cards and student loans) caused me to be turned down for several good jobs. I am under-employed and doing something that you do not even need High school for. The economic crisis is societies fault and their oppressive and corrupt credit practices. One of the agencies that turned me down is with the government. How ironic! The government and the banks are bankrupt and up to their heads in debt but they require more from me then even they themselves can do.
America is the land of the broke and home of the debt slaves. The worst country in the world!
Not sure things are going to change because credit checking for jobs is here and there are a couple of things to know if you are a candidate. Before they can check your credit, you should be asked to sign a waiver allowing them to do so. If you are asked to sign such a piece of paper, they likely will check your credit especially if it is a finance position.
One strategy to handle this is to bring a copy of your credit report with you and just as you would do with a mortgage broker, have letters or note explaining each negative on the report. It is best to get your ’spin’ than for someone to see it and make assumptions. These days many people can sympathize with tough times.
Second there are legitimate credit repair counselors out there. Find one and they are not the guys advertising that they can get your credit debt cut in half. They work for a fee to help you with the reporting agencies to find remedies for your negatives. Find one of these people before you go out on the interview.
@Chris – Thanks!
@Jennifer – Good luck. I don’t really have a great answer for you as far as the “Why?”
@CJ – Woah! Those lax credit policies allowed you to go to school in the first place. Had they not been available, what would your options be? You are going to have to learn to leverage your anger about your situation better in order to be successful IMO. I think the US is a great country by the way.
@Tom – You are correct. Credit checking is here to stay. I always say that candidates need to go on the offensive and downplay any negatives they bring to the table (including bad credit).
I think that in this society today, & this depression we are going thru, we all need some type of help. When you are employed, & your employer treats you like the scum of the earth, this is the time, to find new employment. We all have talents that we’ve been blessed with, now its time to put them into motion. I decided that once I gave my company my very best, & all they thought of me, after getting hurt on their job, was to terminate me & not even tell me. They refused to pay me for my vacation time, my sick time, they paid me for nothing. I want everyone to know that ‘CITIMORTGAGE INC’ IS NOT A GOOD COMPANY TO WORK FOR. They do not treat the employees with respect. The only people that get respect at ‘CITIMORTGAGE INC’ are the favorites, & those that snitch on others. I don’t think this is the way to keep your job. You should be able to work, be compensated for your work, & not feel intimidated when you do not go along with the Status Quo’. Employers have to know, that when you treat people this way, it comes back to rear its ugly head, by way of your employees not working up to their full potential, because they know the Company dosen’t care anyway. CitiMortgage Inc’s policy is, if its working, lets break it, so it dosen’t work. When things are good, CitiMortgage will not let it rest at that, they have to complicate the issues at hand. I gave this company (9) years, & was terminated for being hurt on their job.
same here i cannt find a job beciasue of my credit and i am an honest person…all i do is pray and hope i find one.
I am an experienced nurse RN with 10 years experience and I can’t find a job. My credit continues to get worse beccause of my 3 month unemployment and I can’t find someone to hire me. Does anyone know where a credit repair company exists and if I can’t get a job what do I do to repair my credit?
This is pathetic. I’m 32 and living with my mother. I took out thousands of dollars in student loans for my education so that I could provide decently for myself one day. In the end, all I did was get an education just so I could spend my life paying off my education. Of course, I can’t even do that now. I’m having a hard time finding a job. My bills are piling up and a collection agency informed me that they report to the credit bureau every week. As if it’s not already hard enough to get a job, they have to make it even harder by allowing businesses to check credit and turn people down based on it. It’s nothing short of a way to keep the poor, poor and struggling, withoout allowing them to so much as WORK their way out, but instead forcing them into menial jobs – and making them feel “lucky” for even that much – if even they HAVE that much!
Here’s a tip: In most parts of Europe higher education is free. Only in America do we pile kids under heaps of debt right out of high school, and then create laws MADE to disable the poor from even getting a job to work their way out. And then expect them to “appreciate” their “opportunity.” Right.
If you have parents/grandparents in another country, I would suggest filing for citizenship there. If you have children and can obtain duel citizenship somewhere else, I suggest doing it before they begin college. The US has turned into a slave labor camp. The laws made are creating more and more financial woes, simply because the people who need jobs aren’t allowed to GET jobs because of their poor credit. But they can’t repair their credit unti they can get a job! In the end, they’re lucky if they find even the most low paying, nothing job offered – barely min wage – where they’re forced to work for an income that barely pays rent, let alone covers the loan payments on their “education” that, in the end, they don’t even need for the job they got. Get out while you can. We have a RIGHT to be angry. Get angry – and get out. If not you, save your children now – send them away from here.
I understand Tumble Weed’s comments. I, too, have a $54K student loan outstanding from many years ago – a bill the company was to pay and never did. The money I offered to send in was never enough, and after the harassing phone calls, I changed my phone number.
Contracting firms and temp agencies are a good place to start as far as credit issues. They don’t care what your credit score is – they just want to make sure you have a good work record and no big issues. Oftentimes, once an employer tries you out as a contractor for a direct-hire job, they will be more lenient if you have credit issues.
Credit card debts drop off your report after 7 years. Tax debts and student loans do not. Student loans can, with the assistance of an attorney and your particular situation, sometimes be dismissed due to hardship, but this is rare.
Checking people’s credit for a job should be prohibited. If the potential employer receives good references, and verifies the employees previous history, that should be all they are entitled to know. Somehow it seems like an invasion of privacy to have some company you may not even work for, be allowed to get into your personal life and see what debts you owe! How again is this not illegal?
My son has been broken hearted and devestated by employers who gave him a lot of hope during the first couple of interviews and then didn’t hire him because of his credit report. He was the number 2 candidate for a police job in a nearby town. Everything checked out. He even had veteran’s status, but when they saw his bad credit report and how he has gone from job to job for the past 2 years (because he was working in mortgage and car sales and he was making so little money that he had to chose between paying the rent and credit cards) they told him that his background check didn’t allow them to hire him. He just lost a trucking job for the same reason. The more he’s out of a job, the worst his credit will be. Now he’s considering declaring bankruptsy but I’m now beginning to fear that a bankruptsy on his record will also hurt his chances. Would it be better for him to go through a credit couseling agency or bankruptsy? He’s so desperate that sometimes I think he’s going to have a heart attack.
I got hired for position after pointing out that them fishing in my credit report could be seen as a way of getting information that they are not legally aloud to ask for anyway. That compnay changed their policy after speaking with their inhouse attorney about my comments.
Shelby,
Thank you so much for giving me something to say when asked to sign that waiver! If a job does not involve handling money or being trusted witht tracking finances, then your credit should have nothing to do with getting a position. At one time this practice was not legal. I was surprised to discover it is back.
@ Jennifer I’m not being rude but check your spelling and the coherency of your post. That might give you a clue.
Wow.I didn’t know how much your credit could hurt my potencial (POTENTIAL) employment. I have gone through meny (MANY) job potencial (POTENTIAL) also. But on one has hired me. I have lost my job 09/05/2008. termated (TERMINATED). (WHO CALLED?) called me up and told me this and did not tell me why. no write ups, no verble (VERBAL) warnings. I know california (CAPITAL C) is an at will employee state but geesssss. What is going on? Quantum services didn’t even alow (ALLOW) our legial (LEGAL) amount of breaks, never recorded them, And because of them firing me , I have found it even more difficult to find a job. What now?
Learn to spell?