We all want our credit history and credit score to be as good as possible. Usually so we can get the best possible rates when we make purchases. The better our scores, the better deal on that new car or that house we are going to buy but there is also another reason we should want our credit profile to be squeaky clean; employment.
Some employers believe a potential employee's credit standing is a vital piece of information.
If the job involves handling money in any capacity, employers want to know their workers are responsible with their own finances. Bosses have concerns that a worker who is in financial trouble could be tempted to tap the till, or embezzle, company funds.
Before a potential employer looks into your credit, you have to give written permission. Then, the employer can check your standing as long as they comply with the Fair Credit Reporting Act. The company would request a consumer report, such as a credit report, from a consumer reporting agency.
The act mandates that if you're turned down for a job because of your credit, the employer must give you a copy of your consumer report and a Federal Trade Commission information sheet that describes your rights. You can then dispute the report if it's not accurate.
But before you get there, you can take these steps to improve your credit, and also improve your chances of getting the job:
* Know what's in your credit report. Even if the truth is ugly, the first step to repairing credit is to know exactly what you're up against. Federal law requires the three major credit bureaus to give you access to your credit reports once a year.
* Start paying. If you have debts you've been ignoring, call your credit card companies and establish a payment plan. Even if you can't afford much, lenders want to start getting back the money you've borrowed, so they'll probably make a deal. Don't agree to pay more per month than you can afford, or you'll be likely to start the missed payment cycle all over again. Also see if you can negotiate for a better term, such a frozen or lower interest rate.
* Get a secured card. Secured credit cards are a terrific way to rebuild your credit. You deposit a certain amount with the lender, and the lender will give you a card with a spending limit equal to your deposit. Use this card wisely and make regular payments to show you're now being responsible with your money.
* Be straight during your interview. It's possible the potential employer won't ask to check your credit report, so stay mum on the topic unless they bring it up. If they do ask for access to your information, tell them what they can expect to see in your report. If you're upfront about your negative history and show that you're taking steps to improve it, most employers will appreciate your honesty. It will give you the opportunity to state your case rather than let your credit mistakes speak for you.
Of course, you could always say "no" when the employer asks to see your credit report, but that's probably not a good move. Employers will wonder what you're hiding, and they may imagine your situation to be far worse than it actually is.
