How Your Personal Finances Can Affect Your Job Search

No one likes having their life scrutinized. And when it comes to personal finances, people tend to be even more sensitive about their privacy. Unfortunately, you can't keep everything a secret. When you're looking for a new job, your personal finances could be available for all to see. Learn how your finances can affect your job search.

Why Do Your Finances Matter?

You might be wondering why your personal finances play a role in the job search. As employers consider who to hire, they consider traits like trustworthiness, self-discipline, and decision-making skills. But it's impossible for a hiring manager to look at your resume and determine whether or not you possess those traits.

To find out if you're the perfect fit for the company, an employer may look at your credit history. If you have a history of maxed out credit cards and unpaid debt, an employer may think you have poor judgment or that you can't be trusted.

According to one report, 25% of HR experts use credit or other financial checks to hire employees. So, while one employer might not care about your personal finances, another might dig into your past and use it as a reason to hire you.

What If You're Not Applying for a Financial Position?

You might think that the only people who should expect personal finances to play a role in the job search are those who apply for financial jobs. However, you could be in almost any industry and be on the receiving end of a credit check.

For example, you might be applying for a job at a high-end merchandise store. If you have a history of delinquent debt, you could set off alarm bells. The hiring manager may not trust you to work in a store full of expensive items.

In law enforcement, government agencies, and similar fields, employers usually require a credit check. They want to know that they can trust you, and a clean credit history gives them peace of mind. Under other circumstances, the credit check reduces the chance of a fraudulent application.

What are Your Rights?

Every job applicant should know their own rights when it comes to background and credit checks. If you look for information about your rights online, you'll find conflicting statements. The internet is full of myths and misinformation. It can be difficult to differentiate fact from fiction.

In truth, an employer can't pull your credit score in the way a lender would. They can check your credit report, but only in a limited capacity. Furthermore, the employer needs your permission to pull the report. All of the rules and regulations are in the Fair Credit Reporting Act.

According to the act, an employer needs to notify a job applicant if they plan to use a credit check to impact their hiring decision. The employer needs written permission before they can proceed with the check. After the credit check, the employer must give the applicant a copy of the report along with a copy of the Fair Credit Reporting Act.

Disputing Information

As part of your rights, you are allowed to explain or dispute information in your report. Therefore, you should be aware of your credit history and be ready to explain any issues.

Although most people like to hide from their debt and mistakes, doing so could cost you a job. You should be willing and able to explain any issues on your credit report.

Knowing Your State Laws

The Fair Credit Reporting Act isn't the only regulation in place. There are also state laws in place to keep you safe. In certain states, there are limitations on how an employer uses credit reports to hire new employees.

Depending on where you live, an employer may only be allowed to perform a credit check if the role involves accessing confidential information, secure data, or trade secrets. But, the employer must provide credit checks on all of their applicants. They're not allowed to discriminate.

Improving Your Credit for a Better Job Search

There's a chance that your credit history could affect your job hunt. If you want to improve your chances of a successful job search, you should take the time to improve your credit. In addition to helping you find a new job, your efforts can open the door to new financial opportunities.

To start off on the path to better credit, review your credit report. You can do so for no charge at least once each year. If you go online, you can find several free apps with credit score improvement tools. Even if you pay for an app, the cost could be worthwhile. Your improved credit may be why you get a job offer.

If you haven't already tried to take care of your delinquent debts, make efforts to do so. You can work with a professional to determine the best way to remedy your credit. This could mean using a low interest credit card to pay off outstanding debt, building your credit, or striking a deal with debt collectors.

Find Other Ways to Impress

If you don't have good credit, you might need to wait months before you notice any change. Unfortunately, your job search can't wait. And you don't need to put off your job search because there are other ways to make an employer see your value as an employee.

People with poor credit should find other ways to stand out. For instance, you can spend more time on your resume. You might be able to highlight a certification that few job applicants have, or include a reference that has a stellar recommendation.

Although your financial history may affect your job search, it won't be the only detail that matters. You should pay attention to your credit score while coming up with other ways to show your worth. If you take the time to optimize your resume and apply for the right jobs, you could end up with a job offer.