Your credit history follows you everywhere you go. A healthy financial picture is important not only if you want to buy a house or car, but for other things, you would consider unrelated. Your auto coverage and your ability to rent an apartment can be impacted by negative marks or a lack of repayment history. One area you may not realize may be affected by weak credit history is when looking for a job.
While a prospective employer will not access your actual score, they may want to take a look at your history. Negative marks can help sway the hiring decision. So, if you are on the job search, and know that you have room for improvement, what should your next steps be? There are a few things you can do that will strengthen your credit history and help ensure past mistakes don’t keep you from your dream job.
Look At Your Credit Card Debt
Even if you are always up to date on your bills, credit card debt can reflect poorly on your financial health. High balances and a high utilization rate are both red flags. To get credit card debt under control, consider taking out a personal loan.
Taking out a personal loan to get your finances under control can be a smart move. You can pay off your existing balances and repay the loan at a lower interest rate. By not carrying a balance and lowering your utilization rate, your financial picture will look much more solid. Another benefit of taking out a personal loan is that it rebalances your credit mix. If credit cards are your only type of credit, you are missing out on an easy way to boost your score.
Pay Off Money You Owe
If you have active collections on your account, you need to take care of them. While dealing with charge-offs may or may not make much difference, existing collections that you ignore do not paint you in a positive light. Contacting the collection agency can be intimidating, but they will often work with you. When you call, ask if they will delete the derogatory mark after payment. Some do and some do not. If they won’t delete it, they will label it as paid, which is better than an open collection.
Be ready to pay immediately when you get in touch with the collection agency and you may be able to negotiate for a lesser amount. Let them know you can cover 1/3 or 1/2 of what you owe that day, and many will accept the deal. Be sure to have the arrangement in writing, such as an email, to protect you from further action.
Never Be Late
With the wide availability of auto-pay, there is no reason for any late payments. If you prefer handling your bills manually, set up reminders a few days before your due dates to ensure each is submitted on time. Late payments are noted on your record, even if you always bring your account back up to date. Of course, never being late is essential to avoid credit card debt and increase your chances of getting hired.
Know Your Rights
Of course, it is important to know your rights regarding credit checks and personal finance inspections during the hiring process. Under the Federal Fair Credit Reporting Act (FCPA), employers must inform you that a credit check may be used as a deciding factor for employment. Similarly, you must express written permission to conduct a background or credit check. At the same time, you must be given a notice including a consumer report copy that was utilized to make the employment decision. Additionally, you must receive a summary of your rights under the FCPA. Through this, you are expected to have the opportunity to review your report, explain any negative information, or make any disputes.
Fix Errors On Your Credit Report
Of course, it is important to review any errors that are currently on your credit report. Credit reports routinely contain negative information regarding marital debts, bank accounts, or even names. Therefore, it is fundamental to routinely monitor your status with the three major credit bureaus. If you do find any errors, contact both the credit bureau and the reporting agency as soon as possible. In doing so, clearly identify disputed items, state the facts, and explain yourself. With this information, you can professionally request correction or deletion. Surely, dealing with mistakes on your credit report is essential to boost your chance of employment.