With the job market dominating headlines, we're answering four of the most common questions from viewers.
1. With unemployment benefits ending for millions of out-of-work Americans and few signs of a quick recovery, more people risk serious financial hardship. The Society of Human Resource Management estimates that up to 50 percent of employers run credit checks on job applicants. Sometimes that information is used to withdraw offers and deny employment.
Sadly, with few exceptions, that's legal. But last week, Oregon passed a law forbidding employers from accessing credit history to deny employment unless it can be proved that bad credit has a direct impact on the position. More than a dozen other states are considering such bills, and a similar federal measure has been stalled in Congress.
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To be denied work because of your credit is a vicious cycle. You can't pay your bills because you're out of work, and you can't get hired because you couldn't pay your bills. Even if you don't realize it, most times when you've completed an employment application, you've given the employer permission to check your credit.
So if you're job searching and you know your credit is poor, now is the time to deal with it. First, know what's on your credit report. Everyone is entitled to a free credit report annually from each of the three main reporting agencies. You can get them today at AnnualCreditReport.com. Check for mistakes and inaccuracies, and then immediately work on having them fixed. (Advice on how to do this is provided by the government at www.ftc.gov/credit.)
Don't bring up credit woes during the interview. Wait until you know that the company is going to make you an offer or they've made you an offer that's contingent on a successful background check.
This is your cue to speak up. Let the company know how thrilled you are to receive the offer and how much you look forward to joining. Ask what's involved in the background check. Some companies may limit it to calling a reference or two. Others may run a criminal background check. Not all will run a credit check, so don't spill the beans until you are clear on what's involved.
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If you're told that credit history is part of the background check, address it immediately by offering a brief, well-rehearsed explanation of what they may find.
One option you can alter to make it more your own: "As you know, I've been out of work for 10 months and the lack of a paycheck has had an impact our household finances. This has weighed heavily on me, especially since it's not a reflection on my character or integrity. Once I'm employed, I have a solid plan to repair my credit. I respectfully request that this will not be held against me at this final stage, especially since I'm an ideal match for the role and can't wait to get started."
Other times your explanation may include a medical emergency that your family was hit with, which is one of the leading causes of financial stress. Just be honest and brief. Don't wing it and don't share more than what's absolutely necessary. Be sure you're comfortable with whatever you say.