With unemployment rates in America hitting a near all-time high, the number of applications being received per position is skyrocketing. Couple the unemployment rate with the increasing popularity of employers running credit & background checks on potential employees and the situation is creating a Catch-22 for many job seekers.
This is because your credit profile may be suffering because you lost your job and as a result you have gotten behind with your bills and allowed an increasing amount of debt to be run up; the predicament is that those same actions may currently be keeping you from landing a job with prospective companies. Many job hunters are unsure whether bankruptcy, credit repair, or simply applying to a myriad of job listings in the hopes that there is no credit check is their best alternative.
So where does that leave the rest of the workforce facing this issue? Well, there is very little that people can do to change their credit profiles over short periods of time. So in reality you need to understand the financial choices that you’ve made and demonstrate to potential employers that your credit reports do not define you. There are a couple of steps that should help if you are one of the many in this exact situation.
Know your credit reports
Job seekers can’t defend their financial history if they are unaware of what their credit reports are saying to employers. Credit reports are free every 12 months from each of the three major credit bureaus – Experian, Equifax and TransUnion. They will not show you a credit score, but they do list your entire credit profile over the last 10 years exactly as employers will see it.
As a job seeker you need to be prepared to answer any questions, this includes questions about your financial history as well as your work history. If you seem hesitant or confused in your knowledge of your own finances the hiring employer is going to question your reliability and your honesty.
Be honest
Once you’ve analyzed your reports and see what derogatory items are on there, you may be able to save yourself the time and stress involved with waiting for companies to run your credit & background check. Let them know straight away what they’re going to find. Any legitimate employer will tell you up front whether your infractions are going to cost you the position. Additionally, it demonstrates your desire to be honest with your potential employer. It also affords you the opportunity to explain yourself in a manner that abbreviations and codes on your credit reports won’t do.
Would bankruptcy or credit repair services help?
Yes and no. If you need the issue resolved before a prospective employer pulls your credit in the next few days, then neither of these solutions is going to help you get that job in that timeframe. Both bankruptcy and credit repair services are time consuming processes that need to be looked at long before they can be properly implemented.
While there are laws to prevent discrimination against those with a bankruptcy on their credit reports, the same cannot be said if you are simply in debt. Again, this is another Catch-22 since bankruptcy will generally ruin a credit profile for a minimum of 2 years, affecting the score for longer as it remains on the report for up to 10 years; but at the same time there are no laws against discriminating against those in need of just some simple credit repair, which can take anywhere from 3 to 12 months to have properly done while leaving your credit score intact.
Keep your chin up
Unless they’ve lived under a rock for the past few years, everyone is aware of the state of our economy, and accordingly, the state of individual’s finances. Perhaps you ran up a bit too much debt, perhaps you got a bit behind on some of your bill; so what? It’s likely that you’re not exactly in the best position to bring everything current if you’re out there looking for a job. Employers do understand. So, the better prepared you are to discuss with them your individual situation, and your strategy to get your finances back on track, the better shot you have over another applicant who comes across as just numbers and codes listed on a credit report.
