Credit and how it determines job acceptance
Recently, a guest speaker came into our university today to talk about the process that he took to enter a police academy. Apparently one of the major factors that contributed to him attending the police academy was his credit and how good it was. What I want to know is: Does credit play a big role in determining wether or not you will be hired by a company, or to be accepted to wok for a certain job?
#jobs
#credit
#companies
3 answers
Kim’s Answer
I believe this varies by state. But Texas still allows it. The belief is that if a person is struggling financially, they will be more inclined to steal. I don't know if there is any statistical research to support that.
I know of people who worked their entire lives in banking. When they lost their jobs, and were unable to find new ones right away, they ran up their credit cards, and got a bad credit rating. No bank would hire them.
Police officers are supposed to be above reproach. They should have nothing in their background check that shows that they might be weak in the face of temptation. For example, if someone were to offer them an illegal way to make a lot of money, and they have a lot of bills to pay, it could be tempting.
Safeguarding your credit rating is important for other reasons beyond just getting a job. Your credit rating will determine what interest rate you are charged for borrowing money. The higher the interest rate, the more you will have to pay. It can affect your ability to be approved to buy a house. I believe they also check it when you rent an apartment. For some strange reason, insurance companies also check it (homeowners insurance, car insurance) - at least in Texas.
How to protect your credit rating? Start by creating an emergency fund. You should set aside enough money to cover all your living expenses for 3-6 months. Live within your means. Rather than having to have the latest smartphone, hold onto yours for another year, for example. Don't have too many credit cards (the amount you have available to you on those cards, even if you don't use them, will count against you). I use just one card, and keep the balance low. If you hit a bump in the road, such as losing your job, stop spending as if nothing has changed - cut back to the bare essentials! Financial discipline is not easy, but, it really pays off in the long run.
Good question!
Kim
Kevin P’s Answer
Bad credit usually has to do with debt. Bad credit can usually be solved with money and paying off debt. Not always, but more often that not. So lets take a coupe examples who might care. Police officers, for example. This could put you in a very compromising position. Lets assume you arrest someone that knows about the bad credit and has alot of money. You could be bribed to solve these issues for you. I am not saying you will, I am saying that the possibility is there. In order for police departments to not allow this, they require applicants to have a minimum credit score.
After all, a credit score is an indicator of responsibility and financial responsibility. If you cannot take care of your credit, how could you be responsible enough to take care of the law.
Another profession that does not allow individuals with bad credit, financial services. Think banks, investment firms, and loan companies. This is for a couple different reasons. One, how could you teach others or advice on credit when you yourself are not responsible enough to use it wisely. Two, again, with all this cash around you might be tempted to do something potentially illegal. It is best to not put you in that position in the first place.
Yes, credit is one of those things that is everywhere and we do not fully understand. Yes, one mistake can ruin things for years to come but years of doing the right thing, does not mean you will get the score you think you have earned.
Brian’s Answer
Several employers will check your credit before extending an offer. An employer sees someone who is making timely payments and doesnt have excessive credit card debt will tell them you are in control of your life. If you are struggling and having late payments and have a lot of credit card debt they will probably not hire you. Therefore, make sure you are making all payments on time and have very little credit card debt. This could make a difference in landing a job you want! Good luck!