How Your Credit Score Impacts Your Job Search

The following post explores the topic of How Your Credit Score Impacts Your Job Search.

You might not know this – but your credit score can have an impact on your job prospects. That’s right, depending on what state you live in, your credit score can either help you or hurt you.

Read: Reasons for Using Glassdoor as a Job Seeker

Related: Understanding the Hidden Job Market

Imagine meeting all the qualifications for the job, going on multiple rounds of interviews, and being told that your poor credit history is why they can’t make you a job offer. It’s not fair, but it happens.

Here’s what you need to know.

Overview

Similar to the concept of background checks and drug screenings, credit checks are one of many tools in the toolbox for employers vetting candidates. It is said that credit checks are a method of looking into an applicant’s background, financial stability, and overall suitability for employment.

However, over the last 15-20 years several US states have banned the use of credit checks for employment.

Deemed as both unfair and ineffective, credit checks can unfairly disadvantage applicants who have faced financial hardships due to circumstances beyond their control (like medical emergencies or job loss). That ultimately leads to larger ethical concerns about potential bias and discrimination in hiring practices.

For instance, here’s a post from Reddit about a person’s unfortunate luck of having their job offer rescinded.

Pictured: Screenshot of a Reddit post about a job offer being rescinded.

States Without Credit Checks for Employment

Currently, several US states have specific laws on the books with respect to banning employers from using credit checks during the employment screening process. Those states include California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Massachusetts, Nevada, New York, Oregon, Vermont, and Washington.

Every state has different rules and legal requirements. To better understand the specific differences, I recommend this list of Credit Restrictions by State as a good starting point for your research.

Moving To a New State

If your credit score is getting in the way of your employment prospects, it may be worth considering relocation to a state that doesn’t allow companies to use them. Moving to a more friendly state can alleviate the stress of having your financial past scrutinized by potential employers.

In Conclusion

In conclusion, I hope this article helps you understand the role of your credit score in the job search process. If your credit score is less than stellar, it’s an important factor to consider as you navigate your job search.