In the past few months, I’ve been approached for coaching around financial issues potentially negatively impacting candidates’ success in landing the job. The issues ranged from a retail customer service candidate’s low credit score, to a CFO having gone through bankruptcy due to circumstances beyond his control. He was among the top candidates for multiple jobs, only to hear nothing. It is reasonable to suspect that if vetting or background checks were done on him, financial woes would be a deal breaker for a financial executive.
It is legal for employers to conduct background checks. For executives, vetting and checks are so routine in the recruitment process that one would need to question the wisdom of the hiring entity that does not perform them in today’s employment landscape. No matter what the job—entry-level to senior management—employers use credit reports to form an opinion on how accountable and financially stable you are. The results of a credit check can hinder your chances of getting a job offer if your credit report isn’t top notch. It’s important to note that before a company can run a credit report for employment reasons, they are required to notify you in writing and get your written authorization. But do you want to be in the position of refusing?
If you haven’t checked your credit reports in awhile, you may be missing important clues that reveal problems that are costing you money and possibly that dream job. To find any hidden dangers, you can order your free annual credit report from each of the three major credit reporting agencies: Equifax, Experian and TransUnion. Visit AnnualCreditReport.com. When you receive your credit report, here are three things to look for:
Indications of identity theft
There might be a home address change that isn’t yours, your name spelled differently, a name you’ve never used, inquiries from organizations you haven’t contacted and accounts you didn’t open. If you spot any of these, submit a dispute to the credit agency to have them removed, request a fraud alert on your account so you’re notified when anyone tries to open an account in your name, then file a report with local law enforcement so that you will not be liable for fraudulent charges.
Issues reported incorrectly
Perhaps you paid off a credit card and it’s still showing you owe. Or all your payments were on time, but are reflected to be 30 days (or more) past due on your bill. Companies make errors all the time. It falls on the consumer to be proactive and diligent in catching mistakes. It’s crucial since it can impact whether you’re approved for a loan, what interest rate you’re offered, or whether you get that job! If this happens, complete a dispute form for each credit agency where the mistake shows up.
Missing information can hurt your credit history and career as much as incorrect negative information. If there is positive information missing, you simply don’t look as good to the credit card companies, loan officers or employers. For instance, if a credit card company reports that you’ve been a cardholder for five years when you’ve been one for 12 years, contact that company and ask that they correct the omission. If your bank hasn’t reported that your loan was paid off, have them fix the inaccuracy. And have these organizations send the corrected information to the credit bureaus.
Perhaps your financial status and credit have actually suffered. Recession economies and foreclosures, lost jobs, serious illness and a host of other things can cause financial hardships that include bankruptcy. If this is the case, know the red flags in your background. Be meticulous and honest with any paperwork submitted during the interview process. Always practice transparency with applications or paperwork. If there is a red flag, it is better to disclose it during the interview process where the issue can be put into proper framework. I advise my clients to tell the employer prior to the first on-site interview; there’s no sense to waste anyone’s time. Risk telling the truth. They want you as a candidate or you wouldn’t have gotten this far. A proactive approach can also differentiate you from other candidates. Your straightforward conversation about credit issues and how you’re working to resolve them will play favorably in most cases. You’ll likely be perceived as a person of integrity.
Know and protect your rights. Ask employers how the information is transmitted from vendor to employer. Order your own background search to possibly uncover and correct information that is inaccurately reported. Remember that information provided in a search is only as good as the person who entered it. And whatever the skeletons or red flags in your financial profile, stay confident and calm during the interview process. No matter what comes up from a pre-employment screening, direct the search committee or hiring decision-makers to what you bring to the table. Your success stories. Your skill sets. How you can help ease that employer’s pain. Bad stuff happens to good people. Be up front about the bad; focus on the good.