You’re all suited up and ready for a job interview with your dream company. The interview went well, and you just know you got the job. You can tell by the way the hiring manager smiled at you and offered you water. So when you receive a rejection letter in the mail, you’re floored. What went wrong? Why didn’t you get the job? The answer could be your credit.
No one knows the impact of bad credit more than Jewel Shaw. The 35-year-old single father recalls a job interview he went to in 2008: “I was asked back for a second interview. Usually that means the company is really interested in you. It seemed like I had the job. I later got a letter saying they chose someone else,” says the St. Louis, Missouri, resident. Shaw applied for a job at a bill collection agency. “My resume proved I was qualified for the job. I had the customer service skills, I had the sales background. During the process I got to know the secretary who worked there. I let her know I didn’t get the job and she said, ‘How’s your credit?’ I said, ‘Not that good.’ I was in default on my student loan. She said that was the reason. The employer wanted employees to have good credit; they need to know they can trust their employees with their clients’ financial information.”
Some good came out of this situation. Shaw says he was encouraged to pay off the student loan, get his credit in order, and regularly review his credit report. “I felt like if this was going to be a factor with me getting a job and being able to take care of my family, then I needed to do something about it,” says Shaw.
“It’s not unusual to be denied a job because of your credit history,” says Robert Boyle, a founder and the Chief Executive Officer of Justine Petersen, a St. Louis, Missouri-based company that assists low-wealth individuals and families with developing, maintaining and increasing financial assets. “That’s one of the reasons we work with our clients to show them how to establish a positive credit history,” adds Sheri Flanigan-Vazquez, chief operating officer of Justine Petersen, who notes that improving credit can directly impact one’s job prospects.
Here are four things to know about credit and your job:
- Your future—and current—employer can check your credit report. If you’re being considered for a promotion, your employer can review your report to see how you mange money. Your promotion could depend partly on what’s in your credit report. Employment background checks often include one’s credit report, and more employers are using reports in their elimination process. This is especially true if you’re up for a job that requires you to work closely with money.
- Employers can’t see your credit score. Know that employers don’t have access to your credit score, only your report. Employers receive a modified version of your credit report (known as an employment report) from the three major credit reporting agencies, which doesn’t include your score.
- As your potential salary increases, more of your credit history is analyzed. If you’re being considered for a job that pays more than $75,000 annually, and the employer chooses to do a credit check, your entire credit history will be furnished to the employer—even financial mishaps that are more than seven years old. This includes negative credit information such as bankruptcies and tax liens. Criminal convictions can be reported indefinitely.
- Financial services employees are under more scrutiny. If you’re applying for a job in the financial services industry, it’s more than likely that your credit report will be taken into consideration. Employers want to know if they can trust you with money. A poor credit history will make them uneasy, because it shows you’re unable to handle money properly. The reasoning is that if you can’t manage your own money, you certainly won’t be able to manage theirs.
Sheiresa Ngo is the consumer affairs editor at Black Enterprise.