A poor credit score can really limit you. It might make it hard to get an apartment or rent a home, you may have trouble qualifying for credit cards, mortgages and car loans, and it could mean higher deposits on utilities and other accounts.
In many cases, credit history could even influence prospects for job seekers and job applicants – and ultimately affect one's job search and chances of getting hired.
Not sure where you fall on the credit score spectrum? Start using a credit monitoring service to track changes to your credit score. Credible can get you set up with a free service today.
Can potential employers see your credit score in a background check?
If you submit to a background check during the job searching process, then employers could see your credit report — but not your actual score.
"They can see some of those things that make up your score, such as outstanding balances, loans, collections, missed payments and bankruptcies," said Alajahwon Ridgeway, owner and financial advisor at A.B. Ridgeway Wealth Management.
Though your score isn’t included in these reports, that doesn’t mean poor credit happens can’t hurt you. In fact, Ridgeway said credit scores are "pretty much irrelevant" to employers.
"The actual credit score is a numerical representation of your credit report," he said. "The objective of requesting the report is for employers to know if the candidate is responsible and takes care of their obligations. They don’t need your score to see that — the report is all they need to make a decision."
If you’re worried about how your credit report or score could impact your job options and an employer's potential hiring decision, visit Credible to check your credit without negatively impacting it.
Can bad credit cause you to be denied a potential job opportunity?
According to Mayra Rodriguez Valladares, managing principal at consulting firm MRV Associates, bad credit could definitely mean losing out on a job — especially in today’s financial landscape.
"Employers absolutely can use that as a reason not to hire people," Valladares said. "Particularly in an economic environment like we are in now, employers have a lot of power and can be very picky about whom they want to hire. Supply outstrips demand for many job positions right now."
Keep in mind: prospective employers can only access your credit report if you give them explicit consent. But denying that consent to check credit? It could be just as bad. In this case, Valladares said, employers may "wonder if you’re hiding something."
Think your poor credit is going to hurt your job prospects? You may be able to improve your score through Credible’s marketing partner Experian.
How can I boost my credit score?
You can work toward improving your credit score — and improve your overall credit report — in many ways. First, you can pay off debt over time, which could be hurting your credit score. Paying down balances and lowering your credit utilization rate (or how much of your credit lines you’re using up) can both help your case and reverse a bad credit or fair credit score.
You should also catch up on any overdue accounts or bills, and make sure there are no collection attempts in your name that could be hurting your credit score. If there are, contact the creditor, pay the overdue amount (or settle it) and request that they remove the collection from your report.
Finally, set your bills on autopay. Paying your bills on time is one of the best ways to work on improving credit – but falling behind? That’s one of the easiest ways to negatively impact your credit score.
If there are accounts you’ve been paying that aren’t appearing on your credit report, see if you can have them added. Credible’s partner product Experian Boost lets you choose and verify positive payment history — on phone, utility and even TV streaming bills — that can help increase your score.
The bottom line
Your credit is important in a variety of life aspects – and it can even affect your job search. To make sure you’re setting yourself up for success when employers check your credit file, sign up for a credit monitoring service as soon as possible. With it, you can get instant personal finance alerts on late payments, fraudulent activities like identity theft, credit score changes and more.
Check out some of Credible's credit score monitoring partners here.
Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at firstname.lastname@example.org and your question might be answered by Credible in our Money Expert column.