How to get bad credit neglected by the employer

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Despite a slowly strengthening economy, job seekers have a lot to worry about these days.

Fierce competition and fewer available jobs keep many Americans from joining the workforce.

Unfortunately, job seekers with poor credit have yet another thing going against them.

An estimated 47 percent of U.S. employers perform credit background checks on job applicants, according to a 2012 survey by the Society for Human Resource Management (SHRM). This is down from the 60% who performed credit checks in 2010.

Red flags differ among employers, but can include late payments, maximum credit cards, or other financial black spots that indicate a lack of accountability in the eyes of a hiring manager.

The good news: Even if you have a bad credit history, you can still justify why an employer should hire you. In fact, among organizations that perform credit history checks, 80% say they’ve hired someone despite having a bad credit report, according to the SHRM survey.

A key factor is how you present yourself. Consider these tips from a credit expert and career coaches on how to showcase your strengths and use your bad credit history to your advantage:

Check your credit report.

It is important to make sure that your credit report is free of errors before you go to a job interview. You’ll also want to know what the employer will see if they pick up your report, which doesn’t contain your credit score. (Although keep in mind that reports may vary by credit bureaus.)

“You never want the guy in front of you to know more about your financial past than you do,” says Gail Cunningham, vice president of membership and public relations for the National Foundation for Credit Counseling.

If you want to clarify why a financial hiccup occurred, you are allowed to attach a 100 word explanation to your credit report. The three major credit bureaus — Experian, Equifax, TransUnion — differ in the number of explanations you can include.

However, Cunningham advises against adding too much explanation, as most people can’t attribute every error to something beyond their control.

Give them permission to check your credit.

Employers are legally required to get your permission (orally or in writing) before they can withdraw your credit report, as required by the Fair Credit Reporting Act. Andrea Kay, a career consultant in Cincinnati, says that not giving consent will likely take you off the list.

“You will put doubt in the mind of the employer as to what type of person you are if you say no,” Kay says. “You don’t want to appear to be hiding something.”

Proceed with caution.

Before looking for an explanation for your credit problems, acknowledge the employer’s concern. By stating that you can see why bad credit sets off a red flag, you are showing that you are not trying to downplay the problem. Kate Wendleton, president of career coaching firm The Five O’Clock Club in New York City, says people would be surprised at the number of recent college graduates who, faced with bad credit, say:

“Oh, big deal. Everyone in my generation has a lot of credit card debt.” While this answer is true for some college graduates, Wendleton says a candidate’s candidacy depends on their attitude. “If you take [credit problems] seriously and have a good explanation and tell them the progress you are making and how you are fixing it, ”employers will likely be sympathetic, she said.

Be honest and concise.

Briefly explain how you got into the situation. (Going into too much detail can make the problem seem more serious, Cunningham says.) Next, show the employer proof that you are working to clean up your credit. For example, you can provide them with recent statements showing the credit card payments you made to pay off the debt.

Employers these days are likely to be more lenient with applicants who have recently experienced credit problems due to the poor economy, according to Cunningham.

If it’s obvious you have a long-term credit problem, she says you better be honest: “Tell them you learned your lesson through school hard knocks and that you are a real person. different now. “

It is practice makes perfect.

Just as you would normally prepare for a job interview by repeating answers to specific questions, think about what to say if the subject of credit comes up. “You have to sound so confident about it, because if you look panicked, they’ll panic,” says Hallie Crawford, career coach and founder of the Atlanta-based Create Your Career Path.

If you find it difficult to calm down, be reassured by the high probability that the employer will be understanding. “Employers are realizing that difficult things have happened to good people over the past few years,” Crawford said. She thinks most hiring managers are reasonable people who may also have had financial trouble at some point in their life and are willing to ignore a credit problem as long as they can show it is in the past.

The bottom line:

Always bring the conversation back to evidence that shows you are the best fit for the job. Sharing stories about your accomplishments or how you exceeded expectations in your previous jobs (eg, “I exceeded my sales goals every year”) should convince an employer that you are responsible and can help them. to ignore your bad credit history.

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