Why You Probably Didn't Get Hired
Credit Reports and Background Checks
When applying for a position, one space people automatically fill in is that of their social security number. The only reason a potential employer wants this information is to run a credit score and background check. Usually, in fine print, it states by signing the application, you are giving permission for them to do these checks. By law, they need your permission to get your credit score.
A credit score reflects your credit risk level–a higher number indicates a lower risk. How does this adversely affect a potential employee? If your credit rating is less than satisfactory, a potential employer may not hire you. Not knowing your score puts you at a disadvantage, you have no idea whether you are considered a risk or not. A very good score is 700 or more, 600 or less is in risky territory.
I know a lowered score is unfair to those who have been unemployed (by no fault of their own) for a long time. These folks may have lived off credit cards just to put food on the table and found themselves unable to pay bills. If this is you, do all you can to keep finances on solid ground by working with your creditors, even if that means paying them pennies on the dollar what you owe. Usually, if they see a person willing to do whatever they can, it makes a difference how they might deal with you.
Background checks are commonly done on potential hires. They may see if you have any negative legal issues on a background check, such as your DUIs, drug arrests, jail time, and other personal problems you’ve had. If your background has been less than angelic, you will eventually need to explain these problems to a potential employer. Always be honest. If you’ve made great strides to turn your life around, do be specific in your explanation to the employer.
When was the last time you ordered a credit report from all reporting companies? In California, reporting companies are required to give you one credit report free per year, go directly to their online site, http://www.annualcreditreport.com, do not go through a third party that advertises free credit report. Also, if you’ve been turned down for anything due to bad credit, they will send you a report.
The three reporting companies are; Equifax, Experian, Transunion, which record your payment history on your credit cards, and any other debts you owe (mortgage, car payment, etc.), giving a score. This score determines a great deal, thats why its very important to keep your credit in good shape.
Look over your credit report carefully, make sure your name is correct, the reporting information is correct (who you owe, how much you owe and your payment history). If there are errors, contact that reporting entity immediately, make sure to send a letter to them explaining their error. Follow up to see if what was recorded in error was changed. If not, contact them, they have 30 days.
There are sites that give out what they call public information to anyone who wants to pay a few dollars. What Ive discovered recently is that some of this so-called public information should not be made public, it has been bought and paid for by these sites.
Disturbing fact is, information being put on these very public sites might be from credit reporting companies and banks. The legal implications here need to be examined, since this information should not be sold and put out on the internet for anyone to see, that is illegal. Also, a great deal of documentation reported can be incorrect. Your personal information could be coupled with another person having the exact same name. Your ex’s address or name might appear under your name, or visa versa, leading to confusion.
Google yourself to see what comes up on these sites. If you find information about yourself, make sure to contact them and ask all information on you be removed. They must comply. Go back monthly to ensure they keep you off their list. Write your representatives to push for legislation to do away with these invasive sites altogether.
Your Friendly Bank
With hordes of people logging onto business networking sites such as LinkedIn, advertising they are seeking employment, banks are logging on to see who is now out of work–now a potential risk–in their eyes.
What might the bank do? They could send you a letter explaining they are cutting your credit line limit. How can a bank-lowered limit affect you? It goes on your credit report, lowering your score, even if youve done nothing to warrant that lowered score. Then, the same bank will turn around and use that lowered score (that they initiated) against you! Sounds crazy, but its true. Consumers need to protect themselves against this practice by complaining to the banks and taking action to have their limits reinstated. Remember, a potential employer sees this activity, forming a negative opinion.
Don’t Get the Scissors Out
Before you cut up that credit card, think again. If you choose to cancel a card, it will show up on your credit report as (you guessed it) a negative action. Be very careful if you do decide to cancel one of your cards, making sure your letter to the bank states it was action taken by you, not the bank, so that is stated on the credit report. Then, verify the transaction was done properly on your credit report.
If your credit is not good, your limit is being lowered with good reason, as you are considered a risk, complaining to your bank may fall on deaf ears. In this case, concentrate on mending your bad credit and keeping it clean. If you are unsure how to help yourself in this area, seek out a legitimate business which helps people rectify their credit standing. Be sure you use only one recommended by the BBB or your local consumer protection agency before enlisting a credit repair agency. There are some shady businesses that promise to “wipe your bad credit clean”–that cannot legally be done with accurate, verifiable and current information.
More Bad News
Deciding not to use a card can now have a negative impact too. Banks are canceling cards or charging fees for what they consider to be inactive, again, they are deciding your business for you. Use a card for only the essentials where you benefit. For example; some cards give monetary credit for gas purchases, or give points for other purchases which you can redeem for perks on their sites. But compare them carefully. Not everything is as it seems.
Watch for hidden fees, increased interest rates, and other actions by the bank that affect you. Review what they send you with a critical eye every month. Recently, the government has tried to limit the actions by banks, with regards to credit card practicesbut the banks always seem to find a loopholedodging the bullet to a certain extent.
Protect Your Finances
As I mentioned in my blog “What’s in Your Wallet?”, students are targeted by credit card companies. Don’t allow them to paint a bulls eye on your back. Reign in spending, use cash or checks, monitor what you are doing. Pay off credit card balances monthly. By doing so, you will present yourself to a potential employer in a more positive light.
©2009 Judy Anne Cavey, who resides in the S.F. Bay Area of California, is a credentialed, certified, higher education instructor who taught Work Experience/Cooperative Education and ESL at three community colleges. She is also a freelance writer and grant writer currently authoring a textbook, has designed other learning programs, and worked with several nonprofits. Her Edublog, “Work Experience”, is a not-for-profit endeavor designed to assist job seekers of all ages. http://workforcedevelopment.edublogs.org/