You've anxiously been waiting for a callback. The interview went well, and the management loves you. But there's only one problem. Candidate number two gets the job because you failed to pass the credit check.
This is a common issue for many job seekers, particularly those who have struggled to find work during tough economic times. Some were forced to forgo payments to creditors in an effort to keep a roof over their head and food on the table. And unfortunately, a number of companies are using credit reports to weed out candidates.
In some instances, these employers see these reports as an accurate reflection of someone's character in lieu of reference checks. From their perspective, if you'll be handling money or have any sort of financial responsibility, they want to make sure they're not putting the funds and data of fellow employees and clients at risk. In their eyes, you may be tempted to do something illegal, such as steal cash or someone's identity, or even embezzle funds in an effort to alleviate your financial troubles.
Fortunately, you will know beforehand if a potential employer will screen your credit profile. Under the Fair Credit Reporting Act, the employer must inform you and ask for your written permission to do so.
But don't wait until that moment. Assume these background checks are a strong probability and get ahead of the searches by following these tips:
1. Review your credit report for inaccuracies.
For starters, visit AnnualCreditReport.com to retrieve a free copy of your credit report. Spot anything that doesn't belong? File a dispute with one of the three credit bureaus and immediately notify the creditor. Doing this alone may be enough to help your credit.
Related: Read this guide on how to review your credit report.
2. Research the company before you apply.
Place an anonymous call to the human resources department of any company you are considering applying with and ask if credit checks are required as part of the application process. This is one way to do your own screening and avoid the prospects of rejection.
If you have a direct contact within the company, reach out to see if an exception can be made on the credit check or at least place less weight on it. It's not always what you know but who you know.
4. Get your financial house in order.
Establish a realistic budget and get caught up on any delinquent accounts. Also, try reducing any outstanding debt balances with your disposable income or any money generated by side income. Doing this will lower your credit utilization ratio (the lower this amount, the more room you have to borrow money - a key factor that goes into your credit score). And refrain from applying for any new credit until you are hired to keep the inquiries from lowering your score.
Can't keep up with what you owe? Call the creditor and request to make payment arrangements. While you're on the line, see if the company will lower your interest rate or if refinancing opportunities are available.
Related: See this road map on how to get out of debt.
5. Be honest up front.
Honesty truly is the best policy in this scenario. Although employers typically don't check your credit until you've jumped through all the initial hurdles, you want to go ahead and put it all out there once you are aware that a credit screening will be performed. Provide an explanation of why your credit has dings and what you have done in the recent months or years to turn a new leaf. You may also want to bring along a copy of the credit report to illustrate your point and demonstrate that you are being as transparent as possible.
6. Highlight your strengths.
You want to mention your strengths during the interview to divert the attention of the employer from your credit report to your unique qualities and how you can be a valuable asset to the organization. It also helps to carefully review the position description prior to the interview and identify those key features that you possess to strengthen your case for why you are the perfect candidate for the position.
7. Take a chance.
You never know until you try; the worse they can do is no. But you may very well possess such an impressive skill set that it overshadows your shortcomings, including your credit score. Just be prepared to plead your case should questions about your credit history arise.
If a company refuses to hire you on the grounds of credit issues, the hiring managers must provide you with a copy of the credit report they used to reach their decision along with a detailed summary of why under the Fair Credit Reporting Act. But by following our tips, you should be on your way to overcoming any potential employers' concerns - at least when it concerns your credit history. The rest is up to you.