Most of us know that our credit score can affect our ability to rent property and take out loans for cars, houses and education. However, did you know that your credit score can also affect your ability to get the job you want? Here are a few reasons that companies might look into the credit scores of potential employees, and what you can do to improve your score and land the job of your dreams.
Applying to Work in Finance?
If you are applying for a position where you will be handling finances or other confidential information for a company, it is very likely that there will be a credit check involved. Consistently paying off debt and living within your means demonstrates that you can be trusted to oversee sensitive information for a company. If your credit report reflects habitual failure to pay off debt on time or maxing out on credit limits, then you could appear irresponsible. Your potential employers might decide that you present too much of a risk to be allowed to handle a company’s finances.
Risk Vs. Stability
Since it takes time, effort, and money to hire and train a new employee, most companies want to hire someone for the long-haul. Consistently making payments on time shows that you are able to make commitments and avoid impulsive decisions that could harm the company. Building a solid credit history of payments made on time and responsible use of credit will help make sure your employers don’t count you out when they pull your credit report.
Tie-Breaking
Imagine this: you have an impressive resume, you aced the interview, and you are a perfect cultural fit. However, there’s another candidate who’s just as good a match as you are, and the company is going to have to choose between the two of you. In cases like this one, it is perfectly common for an employer to tap into credit reports in order to break the tie. A credit report can act as further proof of your accountability and whether or not you have long-term goals. That also means that if you don’t take the time to improve your credit score your credit report might hold you back in situations like this one.
Improving Your Credit Score
Improving your credit score takes time, but starting now will make your future that much brighter. A better credit score will not only help you secure lower interest rates, but it will take a huge weight off your shoulders when applying for a job or a loan.
Creating a realistic budget is an excellent place to start. Factor in monthly payments such as utility expenses, rent, gas, your grocery bill and any other regular expenses. Think about how you can cut back on how much money you spend. After you have done these things, you can devise a plan to pay off your debts every month. When paying off debt, start by paying off small balances left over on credit cards you don’t use much anymore. Clearing up extraneous small debts will help improve your score and allow you to focus on bigger sums. Another great way to boost your credit score is to watch how much of your total credit line you are using. Even if you are paying in full on time, using more than thirty percent of your total credit line can hurt your score.
