As the economy struggles to come back around, many folks are struggling to make ends meet. Many people are desperately looking to find work, a process that can be even more complicated by a bruised credit report. While not every company uses a credit report as part of the hiring process, many companies still do take a look at a person’s financial standing as an indication of the type of employee they’ll be.
It’s important to realize, too, that companies have to notify a potential employee when they’re going to run a credit report and whether or not that can be a factor in hiring. So, if you’ve been out of work for a while and are facing some serious credit report issues, it can be helpful to know up front if an employer is going to take that situation into account.
Why would an employer choose to run a credit report on a prospective employee? There are several scenarios in which this can happen. For example, if you’re going to be handling large sums of cash, the employer may want to know that you won’t be tempted to dip your fingers into the till. In other cases, it’s a matter of due diligence. Some jobs, such as certain types of government jobs, just require specific precautions.
How much of a problem this is, overall, isn’t certain. A relatively low percentage of employers use a credit rating as part of their hiring process. In addition, just because a company states that they may include credit information as part of the process doesn’t mean they will. It simply means that they can, and that it can be one factor.
This can be frustrating for some job hunters. Maybe you have credit cards or personal loans, for example, that have had some late payments. In extreme cases, you may have had to file for bankruptcy or have had a home foreclosed. It is especially frustrating, after going through times of financial crisis like this, to be denied employment – the very thing that could get you out of the mess you’re in.
Still, it’s important to keep this all in perspective. In many cases, especially during these economic times, employers face a huge glut of applications. If you’re not getting called back for a particular job, it may have more to do with the sheer number of qualified applicants and not because you have an outstanding personal loan.
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