How to Get a Job When You Have Bad Credit

Bad credit doesn't have to keep you out of the workforce. Here's how to get hired.
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If you've made financial mistakes or have been hit with unexpected expenses, your credit history probably won't be as pristine as you would like. That can make finding a job even more difficult.

You're more likely to encounter an employment credit check as part of an application for jobs with sensitive information or access to money. Still, many employers are interested in your credit history, so read on to find out how you can maximize your chances to get a job with bad credit.

Pull Your Credit Report Before You Start Your Search
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Pull Your Credit Report Before You Start Your Search

Though you might be scared of what you'll find, you should check your credit report at the start of your job search. You're entitled to a free copy of your credit report from each of the three major credit bureaus once every 12 months.

"If you have credit issues, pull your own credit report before you launch your job search," said Lauren Milligan, a career advancement coach with ResuMAYDAY, a resume writing service. "Make sure that it's accurate and, if not, contact the three credit agencies to fix/clear up any errors."

If you find credit report errors, the Federal Trade Commission recommends writing to both the company that reports the negative information as well as the credit bureau to dispute the information. The credit bureau must investigate the claim within 30 days, unless your claim is deemed frivolous. Any incorrect information must be removed, and you won't have to worry about having to explain it to a potential employer.

Only the passage of time can remove correct information from your credit report. However, by knowing what's in your credit report, you can see what potential employers will see and be prepared to answer questions about it.

Related: How to Read Your Credit Report

Research Where You Plan to Apply
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Research Where You Plan to Apply

Different companies likely will have different approaches when it comes to how they view prospective employees with bad credit, so you want to do your research before you apply.

"You can make anonymous phone calls to the HR department prior to even applying to find out if they do credit checks as part of their hiring process. This can help save you from wasting time applying to companies that will take issue with your credit situation," said Valerie Streif, a senior adviser with Mentat, a San Francisco-based organization that helps jobseekers find employment

Some industries and jobs are more sensitive to bad credit histories than others. For example, positions that handle money or secret information on a regular basis are less likely to overlook poor credit history than other positions, Streif said.

"I would recommend that any job seekers work toward careers that are not interested in their credit history for completion of background credit checks," she said.

Know Your Rights
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Know Your Rights

In many states, asking questions about your credit history or pulling your credit report is not illegal. But your potential employer does have to ask you for permission to pull your credit report.

In addition, the information your potential employer receives will only include your credit history, not your credit score. If you have a low credit score simply because you have a limited credit history, your employer will only see your short credit history.

Eleven states plus the District of Columbia have placed legal restrictions on which employers can pull your credit report as part of the job application process. For example, in Connecticut, employers may consider your credit history only for jobs at financial institutions, for jobs that pulling your credit report is required by law and when your credit history is substantially related to your potential job.

Also See: Why Employers Care About Your Credit

If the company ultimately decides not to hire you because of information in your credit history, the company must tell you what that information is and who reported it before eliminating you as a candidate. That way, you have the opportunity to review it and determine if it is correct.

Make a Positive First Impression
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Make a Positive First Impression

Once you have found jobs that you're serious about applying for, make a great first impression with a resume and cover letter that highlight your strengths and why you are the ideal candidate. It's important to be truthful about your credit history, but that doesn't mean you should lead with that information, said Angel Love, an accredited financial counselor, money coach and speaker.

"The resume or cover letter is the opportunity for a candidate to present himself in the best light and therefore should not contain any negative information whatsoever," Love said. "The goal is to get an interview, a chance to find out more about the hiring company, and to see if the candidate would be a good fit for the position."

Of course, in addition to not drawing attention to your credit history, make sure your resume and cover letter set you up as a good candidate. Eliminate all typos and tailor your application to each company. In other words, don't use the one-size-fits-all approach. Show, with unique examples, why you're perfect for the job. Don't expect prospective employers to take your word for it.

Address Your Credit History at the Right Time
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Address Your Credit History at the Right Time

"Job seekers with poor credit should address the issue head on but only in the background-check stage," said Angelo Giallombardo, the vice president of Central Executive Search, a specialty recruiting firm. "Mentioning it prior to this stage can only be a distraction and a reason for the potential employer to move on to a different candidate in their job search."

Definitely don't include it on your resume. But, once a prospective employer asks your permission to conduct a credit check, be up front with the employer about what the report contains.

"As long as the candidate or job seeker is honest with the employer prior to the credit report, there shouldn't be a problem with the employer," Giallombardo said. "Many employers will be alarmed and have red flags for outstanding credit issues, but if the job seeker is honest about these issues before the employer runs the credit report, this can neutralize any concerns."

Be Prepared for Questions
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Be Prepared for Questions

It's not illegal in most states for employers to ask about your credit history, so prepare for how you will respond if asked in an interview. When preparing for your interview, you should collect documentation that shows how you are dealing with the issues that caused your poor credit history.

For example, Dawn D. Boyer, the CEO of D. Boyer Consulting, said that you can show you've applied for Medicare or Medicaid to pay for medical debts. Or you can show that your bankruptcy resolved your past bad credit and that you are working with financial advisers to budget wisely going forward, she said.

"Credit reports [can show] that payments have been made regularly to pay off a specific debt that is past due and pay stubs from a second or part-time job or business can show that income from that source is going toward reducing the back-owed amounts at a steady pace," Boyer said.

What you don't want to do, she said, is show that your debts are from poor decision-making, such as overspending on a car or a gambling addiction. That would reinforce the potential employer's fear that you could be a security risk.

Up Next: How to Improve Your Credit Score This Month

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About the Author

Michael Keenan

Michael Keenan is a writer based in the Kansas City area, specializing in personal finance, taxation, and business topics. He has been writing since 2009 and has been published by Quicken, TurboTax and The Motley Fool.

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