Can You Be Denied A Job Because Of Bad Credit?

Denied A Job Because Of Bad Credit
Reader email:

Hi SheBudgets!

I love the site and have been a reader for the past three years. My credit score is pretty bad and I’m interviewing for a higher paying job at a company I’d love to work for. Can you be denied a job because of bad credit?

Thanks,

Beth

Unfortunately, if you have a low credit score, chances are high that you will not get that job you wanted. Businesses have to protect themselves, and many of them do factor the credit score into their hiring process. If it’s low, they will be unlikely to hire you. It seems counter-intuitive, considering the fact that those who are dealing with or have dealt with a financial blow are looking for work so that they can make money and hopefully right their financial situation, but they cannot get a job.

I don’t know all the details of your current situation, but let’s say you lost your job in the recession. Now you’re living with a ton of debt you couldn’t pay back right away and you’re trying to get back on your feet so you can pay the bills, improve your credit score and move on from a moment in your life that you’d rather not experience again. But no one will hire you, so you can’t fix your credit score to make it better. You know you cannot buy a house or a car, qualify for a credit card or do any of those things with a low credit score, but why can’t you work? We’ll tell you.

Your Financial Situation

Let’s say that you want to go out and get a job at a bank, but you have bad credit. Chances are good that when they see you have liens, foreclosures or late payments on that report, they will not hire you. They can’t take the chance of someone who clearly mismanages their money handling the money and sensitive personal information of others.

Why It’s Not Always a Problem

For some, a bad credit report might not be a huge deal. For instance, a prospective employer might not care if you had a rough year making payment on time and being charged-off by credit card companies if five or six years ago if your financial responsibility has improved since then. They can see it, but they also know that you’re doing better and managing your money in a more appropriate manner, and that might make them more likely to hire.

Where it Might Not Matter

Now, if you live somewhere like Colorado, Delaware or even Illinois, you might not have so much of an issue. These states do not allow potential employers to use much of the information that they find on credit reports in their decision to hire or fire someone, and that might mean you have a better chance at finding a job in one of those areas.

While these are some catch all examples, the best advice I can give you is that if you had some sort of reasonable hardship that caused the drop of your credit score such as divorce, a death in the family, working for a company that went out of business and left you without pay, then you should address the elephant in the room during the interview process. If your credit score dropped because you spent money on lavish gifts to yourself and extended yourself beyond your means, then I would avoid the topic entirely and hope that they simply overlook your credit score.

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