How to land a job despite bad credit

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If you’re job hunting, you expect hiring managers to check your resume.

But you shouldn't be surprised if potential employers delve into another aspect of your personal life -- your credit history -- and turn you down if they don't like what they see.

That's why job seekers should know their rights when companies start to scrutinize their financial history and be ready to deal with unflattering information that could sink an application.

When the Society for Human Resource Management asked employers how frequently they conduct credit checks on job candidates, 40% said they never do, while only 13% said they always do.

But nearly half of employers in the society's 2010 survey said they run credit checks on candidates for positions where financial history is deemed most relevant.

If you're applying for work:

There is no proven link between credit history and work skills, according to a study done at Eastern Kentucky University. And in the society's survey, only one in 10 employers said passing a credit check was the most important factor in a hiring decision.

The vast majority of employers are much more interested in whether you’re a “good fit” with the company culture, have relevant work experience and specific skills for the job, the society found.

Still, some employers see a chaotic credit history as a sign that you may be an unreliable worker.

For a company to access your credit history, you have to give written permission.

Management consultant Nick Corcodilos, who writes the blog Ask the Headhunter, advises job seekers not to “provide consent for a credit report, or even fill out application forms, until after you decide you’re really interested” in the job.

But if you are, and you want to stay in the running, refusing to allow a credit check probably isn't an option.

Among companies that do check credit, more than half conduct the check after offering the candidate a job contingent on the check’s results, the society's survey found.

Nearly two-thirds say that if the credit check turns up something that might affect the hiring decision, they may give the job candidate a chance to explain.

If you have bad credit and are looking for a job, consider these ways to minimize the impact your credit issues could have:

Let the employer know if there's a valid reason your credit is bad. For example, if you are a recent victim of identity theft, let the employer know before they run your credit. Tell them you'd be happy to sign the consent, but you'd appreciate the opportunity to explain some recent incidents that affected your credit.

“Some workers have found the best approach is very direct,” says Anne Janks of, a nonprofit that offers online guidance on workplace rules and rights.

“For example," Janks says, "tell the employer: 'My credit isn’t great because my wife lost her job.’ Or, ‘We have a lot of bills because of an illness in my family -- but I didn't take time off for it.’ Or, ‘I was laid off when the company closed, but I’m a reliable worker -- even more so because I need my job.' "

Be proactive about proving you're a good employee. If you know your credit is less than stellar because you've simply not handled it well in the past, have other evidence ready to illustrate you are responsible.

Janks suggests giving hiring managers copies of awards for attendance, performance reviews and letters of recommendation from former employers.

Ask why you're turned down for a job. It's legal to reject job candidates because of credit issues. But employers are required to tell you if that's the reason and provide a copy of the credit report they used to evaluate your financial history.

Bankruptcy is an exception: Section 525(b) of the bankruptcy code forbids employers from discriminating against workers because they have a bankruptcy on their record.

Companies can't fire employees who file for bankruptcy, and they can't refuse to hire someone who is bankrupt.

However, it can be difficult to prove what factors influenced a hiring decision, and some employers never acknowledge that credit played a role in rejecting a job candidate.

Challenge any mistakes on your report immediately. Obtain free copies of your credit reports from, and look for obvious mistakes. Information is posted to the wrong reports all the time.

Correcting errors on your report probably won't help you get the job you were applying for -- getting a mistake corrected can take months -- but it will help prevent any credit-related issues in the future.

If your credit is bad, don't just give up and accept that you'll always be saddled with that history.

The majority of employers check a job candidate’s credit history for no more than the last 6 to 7 years, according to the society's survey. With some dedication, you can improve your history over time.

Our 7 smart moves to improve your credit score can help you get started.

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