A customized cover letter and a well-written resume can help you stand out when applying for jobs. Your educational background and qualifications can help you land an interview. But most of us don’t know that companies conduct various background checks, including credit checks, that can prevent us from getting employed or from any future employment opportunities.

According to CareerBuilders, over 72% of the world’s employers always do a background check. The survey also confirmed that 29% of all current employers, particularly the government and financial institutions, also examine your credit reports. Fortunately, employers can’t examine credit reports without your knowledge, but let’s find out if your credit score can affect your employment opportunities.

Can Poor Credit Scores Affect My Career Progression?

Despite the claim that credit scores can affect your employment opportunities, there’s no confirmed example of any employer using them to turn down qualified job applicants. A poor or no credit score can be due to unemployment; plus, the best tradeline companies have been known to help people improve their credit score.

This myth has persisted over the last few decades because most people use the phrases “credit score” and “credit report,” which have different meanings. Your credit score shows your likelihood of repaying your employee loan if given one. On the other hand, credit reports show your unpaid debt, repayment history, and different financial accounts. When assessing your credit report, they consider the bigger picture.

For instance, some employers use your credit report to understand your money management pattern. Several collection accounts and missed payments can affect your likelihood of getting a job, especially if the job requires you to handle a company’s finances.

Maxed-out credit cards and several loans accompanied by late payments will show you are likely to commit fraud. This can disqualify you from getting a government job or working in the financial sector. However, if you won’t be handling cash at work, you don’t have to worry about your credit score when applying for a job.

Where Can I Miss Job Opportunities Due to a Bad Credit Report or Credit Score?

As aforementioned, employers can’t do credit checks without your knowledge. Therefore, people do everything within their power to improve their credit scores. This includes purchasing tradelines, which can improve their credit scores.

Fortunately, states like California, Maryland, and Washington prohibit employees and companies from using credit reports to turn down job applicants. However, this rule doesn’t extend to people applying for jobs in the financial sector or the government.

Endnote

A poor credit report can tell an employer many things about you. It can show him your money management skills and commitment to repaying loans. Your credit report can help employers in the government sector and financial institutions determine your likelihood of committing fraud.

However, that’s not always the case, as unemployment and bankruptcy can also leave you with a poor credit score. Your poor credit score shouldn’t affect your employment opportunities. Fortunately, several jurisdictions are against the idea of using credit scores during the job screening process.

Guest writer.