Can You Get a Job With Bad Credit?
Learn why some companies request a pre-employment credit check and how to minimize the effect of bad credit on your job prospects
You might know that credit can be important for things like buying a house or getting approved for a credit card. But did you know that in some states, employers can also check your credit when you apply for a job?
Job hunting can be stressful. And worrying about how to get a job with bad credit can make it feel even more difficult. But you can still get a job even if your credit is less than perfect. Here are a few things to know about why some employers look at your credit and how you can minimize the impact of bad credit when applying for jobs.
Why Do Some Employers Look at Credit Reports?
When you apply for a job, the employer might do an employment background check to gather as much information about you as possible. And some of the information that appears on your credit reports might be reviewed as part of an employment background check.
As the Consumer Financial Protection Bureau (CFPB) explains, employment background checks look at information collected by specialty consumer reporting agencies. The information in these consumer reports could include things like:
- Employment history
- Medical payment history
- Bank account history
- Apartment rental payments
- Rental and homeowners insurance claims
- Auto insurance claims
For certain jobs—like ones where you’re handling money, for example—employers might look at your consumer reports to get an idea of how you’ve handled finances in the past. Your reports might also help an employer gauge your overall ability to responsibly manage projects at work.
Keep in mind that an employment background often looks at more than your credit. As the CFPB explains, an employment background check might also include a criminal background check and public records like bankruptcy filings and other court documents.
Rules for Employer Credit Checks
The CFPB notes that an employer has to get written permission from you before conducting an employment background check that uses information from a consumer report. And if an employer decides not to hire you based on information in your credit report, the employer must provide you with an adverse action notice that includes instructions for how to request a copy of the report.
An adverse action notice can be given orally, in writing or electronically. It should tell you that the employer decided to deny you employment because of information in a consumer report. The adverse action notice will include the name and contact information of the consumer reporting agency that supplied the report.
And as the Federal Trade Commission (FTC) explains, “You have the right to dispute the accuracy and completeness of any information in the report, and to get an additional free report from the company that supplied it, if you ask for it within 60 days of the employer’s decision not to hire or retain you.”
Ways to Minimize the Impact of Bad Credit When Applying for a Job
Now that you know a little more about why employers might check your credit report, you might be wondering: How do I get a job with bad credit history?
There’s no one answer for every situation. It depends on things like the type of job you’re applying for, the employer, your specific credit history and many other factors.
In some cases, the employer might not look at your credit report at all. And even if they do, a bad credit history may not be a deal breaker. But if you’re worried about how your credit history might affect your job prospects, here are a couple things to consider.
Show Why You’re Qualified for the Job
Don’t be afraid to put your talents on display and show the employer why you would be a great fit for the job. You can talk about your relevant work history, education, skills, life experience and so much more.
For some jobs, your credit history might matter more than others. But showcasing your qualifications is always a good idea.
Explain How Your Credit Won’t Affect Your Job Performance
If you know your credit history isn’t great, the FTC recommends being ready to explain it to your potential employer and why it won’t affect your ability to do the job. You could even share how you’re proactively working to improve your credit.
Ready to Start Rebuilding Credit?
Your credit is only one part of an employment background check. And even if you have less-than-perfect credit, it doesn’t have to stay that way. Rebuilding your credit takes time. But it’s never too late to start. And remember, your credit history doesn’t define who you are and what you have to offer professionally.
A great place to start is reviewing your credit history. Your credit score is affected by a number of factors. So knowing what’s on your credit report will help you figure out exactly where you stand.
Keep in mind: You have multiple credit scores and each is calculated using a different scoring model. Scoring companies like FICO® and VantageScore® even have different versions of their own scores. So you might see slightly different scores depending on what model was used.
One way to monitor your credit is with CreditWise from Capital One. With CreditWise, you can access your free TransUnion credit report and weekly VantageScore 3.0 credit score anytime. And it won’t hurt your score. CreditWise is free and available to everyone—not just Capital One customers.
You can also request a free annual credit report from each of the three major credit bureaus once every 12 months.
Government and private relief efforts vary by location and may have changed since this article was published. Consult a financial adviser or the relevant government agencies and private lenders for the most current information.
We hope you found this helpful. Our content is not intended to provide legal, investment or financial advice or to indicate that a particular Capital One product or service is available or right for you. For specific advice about your unique circumstances, consider talking with a qualified professional.
Your CreditWise score is calculated using the TransUnion® VantageScore® 3.0 model, which is one of many scoring models used by lenders. It likely won’t be the same model your lender uses, but it is an accurate measure of your credit health. The availability of the CreditWise tool depends on our ability to obtain your credit history from TransUnion. Alerts are based on changes to your TransUnion and Experian® credit reports and information we find on the dark web. The tool is not guaranteed to detect all identity theft.