Yes, you can get a job with bad credit. However, you can be denied employment due to bad credit in financial positions, managerial positions, law enforcement, and federal jobs.
Looking for a new job but not sure Can You Get a Job With Bad Credit?
Well, you can. However, most people don’t have any idea that even your credit score can be an indicator for new employment.
But don’t worry. Because in this article, we are going to find out Can You Get a Job With Bad Credit? does credit score affect job hiring, If so, then in what states, what are your rights regarding this, and many more related queries. So, stick here till the end.
But to understand if a poor credit score affects employment or not, first, you need to understand your credit score properly.
Understanding Credit Score
According to Investopedia,
“A credit score is a number that depicts a consumer’s creditworthiness.”
To simply put it, credit scores are three-digit numbers that indicate your financial history. It includes all your financial obligations including credit cards, credit card debts, loans, mortgages, medical bills, student loans, utility bills, etc.
Credit scores are managed by American Credit bureaus. The three-digit numbers range from 300 to 850. Let’s have a look at which scores are considered good and which scores are considered poor.
- 300 – 579: Poor
- 580 – 669: Decent
- 670 – 739: Good
- 740 – 799: Very good
- 800 – 850: Excellent
Now that we have got a short description of credit score. So, it’s time to move back to Will A Poor Credit Score Affect Employment or not.
Can You Get a Job With Bad Credit?
Yes, you can get a job with bad credit. However, getting a financial-related, managerial position or a federal and law enforcement job won’t be possible with a bad credit score.
A poor credit score can affect your new employment or employment search. So, if you are not pursuing the above jobs then you should not worry much. But you are not completely out of jeopardy.
Because according to a 2018 survey by Professional Background Screening Association,
“Around 47 percent of employers run credit or financial background checks on at least some of their candidates.”
As a result, you might need to face a credit check for almost 1 out of 2 jobs.
However, some employers can only contact your credit grantor while others contact the credit bureau to run a pre-employment credit check. They can not view your actual credit score. But what is a job offer credit check?
What Is A Pre-Employment Credit Check?
A Pre-Employment Credit Check is a summarized version of your credit history. It includes your payment records, your student loan, credit card debt, mortgage details, and your available credit.
However, it does not include your age or your credit score. So that there is no discrimination.
Now that we have understood pre-employment credit checks. So, it’s time to learn why this credit check is done.
Why do Employers Perform A Pre-Employment Credit Check?
Before employment, it’s common for employers to do a background check.
However, for higher-level jobs or jobs that include some sort of security clearance, sensitive information, or money, employers have to be more careful. As a result, they perform a pre-employment credit check. But there are other reasons too. They are
- The financial history of candidates indicates a lot about their behavior. Because missed payments, high debts show that they are not fully responsible for their finances. So, there is a chance that they might not be responsible for their job too.
- Employees with bad credit can be easily bribed or manipulated by competitors. So, there is a chance that they can hand over sensitive company information.
- Bad credit also indicates financial hardship. That can be a sign of extra stress which can lead to low performance.
- Lastly, an employee with bad credit is more likely to perform fraud or theft.
These are some reasons why employers do a credit check. However, will bad credit affect getting a job? can you be denied employment due to bad credit?
Can You Be Denied A Job Because Of Bad Credit?
Yes, you can be denied a job because of bad credit. If you have applied for jobs in the financial sector or managerial positions and your employer finds out about your bad credit then you will most likely be denied the job.
Though there are some laws regarding this. Yet you can still be denied.
But this is not true for all states. Because some states have different laws regarding credit checks. As a result, employers in those states can not check your credit report. So, which are those states?
Which States Prohibit Employers From Performing A Credit Check?
Some states have strict laws which prohibit employers from doing a credit check. Because if people with bad credit are denied a good job then how can they improve their credit.
The below states do not allow employers to do a credit check.
Moreover, cities such as Philadelphia, the District of Columbia, Chicago, and New York City also have their own set of rules for a pre-employment credit check. In these cities, only high-level financial jobs, managerial positions, law enforcement and IT jobs lawfully require a credit check before employment.
States excluding these 12 do not have any law to prohibit employers from doing a credit check. So, if you live in any of the other 38 states then you can be the subject of a pre-employment credit check.
Well, we have learned about which jobs and states require a credit check. Now let’s learn do government jobs check your credit or not.
Do Government Jobs Check Your Credit?
Yes, most federal jobs and some state government jobs check your credit. Jobs in law enforcement, state department, and IT, are most likely to perform a mandatory credit check.
Basically, government jobs that handle critical information about US citizens, finances, sensitive state secrets, and research information must require a credit check. This credit check can happen to both applying candidates and existing employees.
However, low-level government jobs don’t do credit checks.
So, there is a possibility that poor credit can affect your government jobs too. But is there any law in your favor?
Your Rights Regarding Pre-Employment Credit Check
Though you can not control whether an employer will do a credit check or not. But you have some rights regarding pre-employment credit checks.
According to the Fair Credit Reporting Act,
“ An employer must take your written consent before a credit check.”
Moreover, if your current employer is doing a credit check and denying you a job then your employer must give you at least 5 days time to do any corrections or explain your situation. Otherwise, you have the right to report to local authorities or the Consumer Financial Protection Bureau.
But CFPB does not accept individual reports. So, you need to find people who had the same experience with the employer and file a report.
Now that we have learned about your rights. So, it’s time to learn which credit scores can deny you a job.
What Credit Score Will Prevent You From Getting A Job?
As we have mentioned before employers can not get a hold of your credit score while credit check. So, there is no particular score that will prevent you from getting a job.
However, employers can view and evaluate your payment records, your student loan, credit card debt, mortgage details, and your available credit. By evaluating these things an employer can either deny or accept your employment.
So, keeping these reports as decent as possible would be a good idea to prevent job offers rescinded after a credit check.
If you want to know whether debit cards affect credit score then check out our article on if debit cards affect credit score.
It’s time to learn whether a pre-employment credit check can further hurt your credit score or not.
Does Employment Credit Check Hurt Your Credit Score?
No, an employment credit check does not hurt your credit score. Because an employment credit check is a soft credit inquiry. Though it appears in your credit report. However, it does not negatively affect your credit.
So, do not get afraid of applying for jobs because of these employment credit checks. You can apply for as many jobs as you like and the credit checks won’t affect your credit score.
Lastly, how can you avoid job offers rescinded after a credit check?
How To Avoid Job Offer Rescinded After Credit Check
Well, the simple answer is you should improve your credit score. It’s the only way to avoid this situation. Check out our article on improving credit scores to know more.
Lastly, you should improve your financial literacy to avoid ever getting into a bad credit score.
Credit score can affect your ability to get a job in some positions. So, be sure to keep your score good. However, don’t loose hope if your credit score is low, keep trying you will get a job.
Moreover, if you think an employer have violated your right regarding this then consult with an attorney. If you have any questions or confusion then please let us know in the comments.
That’s it for today. Have a great day!