We all know that bad credit can prevent approval for car loans and mortgages—but can it also affect your career?
CNN Money reports that it can. According to a recent survey performed by Demos, a liberal think-tank, companies are increasingly performing credit checks on potential employees: Approximately a quarter of unemployed Americans have had their credit scores checked when applying for a job, and one in ten have been rejected for their bad credit.
Aren’t there federal rules outlawing this sort of discrimination? Yes, there are: Potential employers must be granted permission to run credit checks and must inform applicants if their credit score was the reason they weren’t hired. But it’s a hard rule to enforce, since employers can easily give other reasons for withholding the job.
Could a Credit Mistake Cost You the Job?
Imagine getting turned down for a job because of your poor credit—that you didn’t actually earn. That’s the case for some applicants, who are denied jobs based on low credit scores that are the result of a bureau mistake.
And that’s one of the primary reasons everyone, whether applying to jobs, thinking about a mortgage or other loan, or just staying financially healthy, should regularly be checking their credit score. Studies say that up to 25% of scores contain significant errors (such as outdated personal information, mistaken or fraudulent accounts and incorrect account details), and believe us—no one is triple-checking the accuracy of your credit except for you.
Check your credit report for free once a year at AnnualCreditReport.com, and if you notice any inaccuracies or errors, be sure to dispute them immediately. Everything look good? Then continue focusing on building up that score (if you don’t know where to start, our checklist I Want to Monitor and Improve My Credit Score should help)—you never know how it will come in handy in the future.