4 Ways to Handle Bad Credit During Your Job Search

People with poor credit can use bad credit loans to access urgently needed funds. But securing a job with bad credit may be tricky.

Some potential employers may check your credit report if they’re considering you for a job at their company. They usually do this to verify your employment history and check for any employment gaps. Specific federal jobs and most jobs that require employees to work with money likely require good credit for successful job applicants.

Is bad credit a dealbreaker when applying for a job?

The answer varies from one employer to the next.

Many employers may pull your credit report to verify your employment but may not be too concerned about your credit history. Others may take missed or late payments (or poor credit in general) as a sign of bad organizational skills.

It’s important to know that not all potential employers conduct credit checks. Moreover, potential employers can’t run a credit check without your permission. You can choose to decline if you prefer.

How to handle bad credit while job searching

Those with less-than-perfect credit may want to consider how this impacts their job search and form a strategy accordingly. The first step is checking your credit. Canadians can access their credit report once every year. You can get one free copy each from Canada’s two credit bureaus. Consider pulling your report before you commence your job hunt.

Here are some steps to deal with bad credit during your job hunt.

1. Improve your credit

Improving your credit is a no-brainer since better credit helps more than just your job prospects. It helps your overall creditworthiness and makes you an attractive candidate to lenders.

Take steps to improve your credit, like paying down any outstanding debts, making monthly payments in full and on time, and regulating your credit card use. Avoid carrying a balance on your credit card or keep any outstanding balances as low as possible.

2. Explain your credit issues proactively

Talking about your personal finances with a potential employer may be uncomfortable, but it may help you clinch the job.

If the employer has requested authorization to pull your credit report, take the time to explain any issues in your report. You don’t have to go into detail, but providing an overview of the circumstances may help. For instance, you may want to inform them that you missed a loan payment because you were furloughed. You can also mention that you’re actively working to improve your credit.

3. Highlight your skills and experience

It’s a given that all job applicants are looking for ways to highlight their skills and achievements. But someone with poor credit may need to go above and beyond to prove they’re the right person for the job.

Don’t be afraid to mention your relevant work experience to demonstrate your fitness for the role. Consider bringing a portfolio of your work or a spreadsheet documenting your achievements as a visual aid for discussing your experience.

4. Ask the interviewer if credit is a crucial factor in eligibility

You can ask about which aspects of your credit report the employer cares about and how much weight it holds.

Knowing how important your credit is to them can help you determine what you want to say about it. For example, a potential employer may say that credit checks are just a formality and they don’t look too closely at your payment history. This tells you that you don’t need to explain your credit. On the other hand, they may say good credit is crucial to securing this job. In this case, you can discuss why your credit score dipped and your ongoing efforts to improve your credit.