Can you get a job with bad credit?

Yes, you can get a job with bad credit. Many employers don’t consider credit history. But if a potential employer wants to check your credit as part of a background check, they’ll need your written permission to do so. Some states also have laws preventing employers from using financial information in hiring decisions.

What you’ll learn:

• You can still get a job with bad credit. It’s also possible for an employer to deny you a job because of your credit history.

• Not all employers review credit history, and many states have laws preventing employers from using financial information in hiring decisions.

• If an employer wants to review your credit history, you will have to give them written permission. If your credit is the reason they decide not to hire you, they’re legally obligated to tell you.

It’s possible. If an employer wants to consider your credit history, they must comply with the Fair Credit Reporting Act (FCRA). That means they must get permission in writing to check your credit and provide you with a copy of the report. They’re also obligated to tell you if you were rejected because of your credit. This can only happen in states where employers are not prohibited by law from using this information.

Some employers check credit history to gauge how financially responsible a candidate is. If you’re applying for a government role or a position where finances matter, like an accountant, employers may be more likely to consider your credit history relevant. This may be done as part of a larger background check.

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

Here are the rules employers must follow according to the CFPB: 

• An employer has to get written permission from you before conducting an employment background check that uses information from a credit report.

• 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.”

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. Here are some suggestions to consider if you have bad credit.

If you know your credit history isn’t great, be ready to explain it to your potential employer, including why it won’t affect your ability to do the job. If there are extenuating circumstances related to your credit history, explaining what happened could make a difference with your potential employer.

Improving your credit takes time and responsible habits. But you can take some steps that might make a measurable impact sooner rather than later. You can also point to these steps in conversations with the hiring manager.

• Review your credit regularly.
• Keep credit utilization below 30%.
• Pay your bills on time.
• Make payments on past-due accounts.
• Limit hard credit inquiries.

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.

One way to monitor your credit is with CreditWise from Capital One. With CreditWise, you can access your credit report and credit score anytime. It’s free, and using it won’t hurt your scores.