Is Your Credit Score Hurting Your Job Search?

Are you looking for a new job? In addition to making sure your resume is in order, you may want to take a look at your credit score and your credit reports. Many potential employers pull your credit file before they hire you. No, it doesn’t seem fair; if your finances were in such great order, you might not need a new job, right?

Right or wrong, here’s their rationale:

– Studies show that employees with extensive debt or who are in financial trouble are at greater risk of committing corporate fraud or embezzlement.

– As the self-improvement gurus say, “How you do one thing is how you do everything.” If you’re irresponsible with your finances, you may be irresponsible on the job, too. (They say!)

– If your finances are a mess, you may have trouble concentrating, which could lead to poor work performance. (Again, isn’t your financial mess why you need the job in the first place?)

Raise Your Credit Score in a Hurry

If your credit score is less than stellar, there are ways you can fix it fast. (No, this isn’t one of those commercials for a credit repair service… steer clear of those!) These are all things you can do yourself for free.

First, pull your credit files from the three major credit reporting agencies: Equifax, TransUnion, and Experian. Correct any errors by filing disputes with the agencies.

Then, take a close look at your debt-to-available credit ratio. In addition to on-time payments, this is a key factor in determining your credit score. To find this number, look at your credit card balances in relation to your credit limits. The ratio should be under 30%. Make a plan to begin paying down your debt on your current salary while you continue your job search.

Continue making on-time minimum payments, as this is the number one factor in determining your credit score. If you are unemployed and can’t make your payments, work out an arrangement with your creditors.

And take heart. Most employers aren’t as strict as lenders, who might be looking for a score of 720 or better to offer the best loan rates. If your credit reports shows a score in the mid-600s and no major delinquencies, you should be fine.

Guest Bio: Dawn Allcot is full-time freelance writer who covers personal finance and credit management every day at Creditshout.com. She’s recently become a credit score-tracking junkie and is aiming for the elusive 800 + FICO score.