A poor credit score does not only make it difficult for you to get approval for a loan, it can also have a negative impact on other areas of your life. If you have bad credit, you will find yourself in a disadvantaged position when you are trying to secure a job. According to a Society for Human Resource Management study, about 47 percent of American companies perform credit background checks when they are hiring. Here is a look at how improving your credit score can help your chances of getting hired.
Why Do Employers Check Credit Scores?
Basically, employers check the credit reports of their prospective employees to get a better idea of their ability to fulfil their responsibilities. A bad credit score suggests that you are not a financially responsible person. If you are unable to meet your financial obligations, there is a higher chance that you will not be committed enough to perform your job duties satisfactorily. This is an important consideration for your potential employer if you are applying for a job that requires the handling of sensitive information or finances.
Also, some companies are wary of hiring job candidates with bad credit because they think that people who have accumulated large debts are more likely to steal from them. Doing credit background checks is an effective measure to lessen liability for negligent hiring.
How to Repair Bad Credit to Boost Your Job Chances?
If you want to fix your bad credit to make a better impression on your prospective employers, you can do the following:
- Check your credit report – Try to gain a better understanding of your financial situation and look for errors that may have negatively affected your credit file.
- Make payments on time – Make an extra effort to ensure that you pay all your credit and non-credit bills on time.
- Pay down your debt – Devise a plan to reduce your debt and credit utilization. If you need help creating an effective plan, you can read this review to find out more about credit repair as an option.
Eventually, your qualifications are still the most important factor affecting your chances of securing a job. However, having a good credit score can be a difference maker if another candidate applying for the same job has the exact same qualifications as you.