Better Score; Better Job

Your credit history can work for you or against you. Your proven ability to manage your money and meet your financial obligations is often viewed as an indication of your maturity and stability and can open many doors. Prospective employers view a strong credit history as a positive sign that you will meet your obligations and responsibilities to them as well. A poor credit history could result in not getting that dream job.

Employers Want Reliable, Responsible Employees

Employers have begun to take a serious look at credit reports and scores as another requirement for hopeful applicants. The types of employers who examine credit reports tend to be in the more professional career fields. While this may seem unfair and illogical to applicants, the reasoning behind it is rather simple. Employers are concerned that with bad credit, the employee will not be able to focus fully on the job at hand.

According to Tom Garmin, a leading expert for 25 years from Virginia Tech in the field of financial impacts on worker productivity, states that "Financially distressed workers are like a poison poured on the floor of the workplace. You can’t see the poison, but it’s there.  It permeates more than just the employee who has a problem.  It permeates the workforce.”  He also notes that “About a third of employees say that financial problems are affecting their job performance...  Wasting about 20 hours of work time a month dealing with money problems, according to research on employees in 25 states.  (click here for article)

What’s more, employers don’t want the day disrupted by persistent calls from bill collectors to their employees. This is a valid concern since the more tenacious of bill collectors have been known to harass debtors at their places of employment.
Potential employers may use your credit history to determine whether or not you are a good risk. If you’re a poor credit risk, you may also be seen as a poor employment risk. According to an article on The Wall Street Journal Career website, a survey by The Society for Human Resource Management found that 35% of employers checked credit reports. That was in 2003…up from 19% in 1996. It's even higher today.

Your employment history is not part of your credit score, but your credit score could be factored into your chances of getting a job. A good credit score could also give you an edge if a potential employer runs a credit check for applicants.
If you're interviewing for a position that involves finances, confidentiality, and handling money then it's likely that your employer will run a credit check before they make you a job offer. Some companies check applicants' credit regardless of the specific position under consideration.

Many employers believe running an employment credit check is an absolute must if the applicant under consideration will be handling money, or be placed in a position of financial trust, sighting a possible correlation between high debts and, for instance, the possibility of embezzlement.

Credit history may reveal several qualities of an applicant's financial status, such as debt load and potential debt load. The employment credit report can identify the possibility of financial problems that may adversely affect an applicant's performance on the job.

An employment credit report provides an easy-to-read insight into an applicant's financial responsibility as well as listing any aliases, bankruptcies, liens, judgments, credit cards, loans, mortgages, collections and summaries of the individual's payment patterns. Reports may also contain previous employers and addresses.

Overall, it's a reflection of a person's character. That's the assumption these companies make. Given everybody is equal in their backgrounds and skill set, if one person has a better credit score, you're probably going to be better off with that person. (insert story)

This is all part of the trend to use credit history outside of traditional lending. Insurers and employers have found that credit behavior does not exist in a vacuum and can be predictive of future behavior in other areas

So, you can see the consequences of bad credit are becoming more far-reaching every day. Of course, this is in addition to the usual pain and suffering caused by high interest rates, excessive fees and the unpleasantness of having to deal with progressively hungrier lenders as your credit history deteriorates.