Can having bad credit affect a job offer?

For better or worse, your credit score paints a picture of who you are as a consumer. It proves you are who you say you are – and that you can be trusted to act in a company’s best interests.

It’s true that having a low credit score can present plenty of extra barriers or challenges in your life, but can having a less-than-perfect credit score really hold you back in the world of work? Unfortunately, the answer is yes – albeit not always.

Where a strong credit history says you are dependable, disciplined and a smart decision-maker, a shaky score can make you appear like a bit of a wild card. In other words, a risk.

How much does bad credit matter when getting a new job?

Ultimately, it all comes down to the sort of job you are applying for. If, for example, you are looking to work in a legal or finance firm where you are likely to be dealing with money, these companies have a legal obligation to perform a credit check on you. This is to ensure you have a solid background that proves you can manage money, and that your work will be unaffected by any financial troubles. In other businesses, this kind of information is less relevant – and employers are less likely to check.

Even if your employer does see something they don’t like when checking out your credit file, they may prioritise information in their own way. For example, many will be willing to overlook one missed credit card payment if it means they can hire a rare talent with fifteen years’ experience under their belt.

What about if I am looking to start my own business?

There are also implications if you are looking to start your own business. Having a low credit score could make it difficult to obtain essential lines of credit with your bank and suppliers, making it much harder to gather momentum in your first months and years of trading.

It could also affect your relationships with customers and partners. The lower your score, the greater the risk for those looking to do business with you. Remember that if you are a sole trader or an individual member of a partnership, poor financial decisions you make for your business could affect your personal life and vice versa.

When all is said and done, the truth is that you could be denied a job based on your credit score if your employer deems it important. For this reason, if you have a low score at present, it is important that you start taking action now to improve it – even if just to be on the safe side.

How can I improve my credit score?

So, you have bad credit and you know you need to do something about it so that it doesn’t hold you back when finding the right job. There are a few ways that you can improve your credit score.

Firstly, you might not be aware that you can improve your credit score simply by registering to vote. Doing so helps lenders to verify that you live where you say you live. This makes you a more reliable and safe candidate for a loan. If you have lived at your current address for less than 3 years, remember to tell your lender so that they can verify your address easily.

It’s also good practice to check your credit file for any errors. It’s more common than you think for there to be mistakes on your report that might be having a negative effect. Take a close look through the report and flag up anything that doesn’t look right.

Lastly, you could agree to a payment arrangement on any outstanding debts. Ideally, you should only ever take on debt that you can afford to pay, but if your circumstances have changed then this is the only way to move forward and maintain your credit rating. Being able to make your repayments is arguably the best way to improve your credit score. Speak to the relevant companies and work together on the best way to do this – even if you are just making the minimum repayments.

If you have a bad credit score, turn to us at Fair for You. We offer flexible repayment plans on household essentials and more. Yes, we do run credit checks but our decision isn’t only based on your credit score. It can, however, be really crucial that you improve your credit rating in order to get a loan. Find out more about our approach to credit ratings, or watch our video on what to do if your loan was declined.

Good luck on your job hunt!