Why Employers Are Looking Into Your Credit Past And What You Can Do To Prepare
By 2017, almost 96 percent of employers were conducting some variation of background check on potential employees, based on information uncovered in a survey by HR.com and commissioned by The National Association of Professional Background Screeners. Out of the 1528 participants, 87 percent of them admitted to running a credit or financial check on potential hires. Considering this showed a 44 percent increase in a decade, it is safe to say that employers are looking beyond the resume. The process has quickly become a standard practice in a world where individuals are increasingly competing to be hired.
For most employers, the motivating factor centers around gathering information and making the best hiring decision for their company. For some, they are seeking assurance of the right hire in sensitive numerical or financial positions. Regardless of their reasons behind the checks, if you are job hunting chances are that you will be asked to sign an information waiver to allow your potential employer to take a peek at your financial past. For those with a not so stellar credit past, there are steps that they can take to be proactive when it comes to revealing their financial past to their employers.
Armed with an Answer
One of the best approaches you can take when dealing with checks into your financial past is to be prepared. Know what is in your report and the details of any misdemeanors if any. There are a magnitude of resources from which you can obtain your credit information and you are permitted by the United States Fair Credit Reporting Act to access it once annually. By taking the time to familiarize yourself with your financial ratings, you gain the time advantage of preparing an answer should you be asked about it in an interview.
If you are asked about your poor financial past or past credit mistakes such as late payments and delinquencies, your best bet would be to briefly explain your circumstances. Acknowledge any errors in judgment on your part. Use the circumstance to show your ability to grow and learn from your experiences.
Another route to take in ensuring your credit past is in tip top shape is to be proactive in getting your report in good shape. Most delinquencies and late payments stay on your report for 7 years. If you have outstanding bills or student loans, you can contact creditors and make arrangements for a payment plan. Building up a period of on time payments and good credit utilization can also work in your favor. Chances are employers will see it as you getting your finances back on track. Unfortunately there are some errors that will still show up on your credit file so it is always best to be prepared with an answer.
Look Into Getting Your Report Accurate
Before you send out any job applications or head into the interview room, you may be able to correct any errors by making contact with the specific creditor and sorting it out. Be sure to make note of any transaction numbers or useful information for future reference. You may also ask that the creditor then reports the change to the credit agencies so that it may then be reflected in your credit report.
If you do find yourself being refused jobs based on a poor credit history or report, consider seeking employment in smaller, more local companies. Their recruitment process is not likely to follow the detailed background checks like larger corporations. You can then begin to rebuild your credit file and score as you work, by maintaining your debt payments and following the rest of the credit do’s and don’ts.
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