A Bad Credit Report Could Cost You A Job.
While I was at 7-Eleven picking up coffee something stared right in my eyes.. There was a newspaper with the headlines "A Bad Credit Report Could Cost You a Job".
I picked up the newspaper and started reading the article. It was an fascinating article talking about how more and more employers are using the credit reports to decide if they would hire a candidate or not.
This is a very dire situation. Millions and Millions have a bad credit not because they want to, because some had job losses, medical emergencies and some have so much mental stress that they can't even think straight. It is really a, what came first, "the chicken or the egg" situation. The statistics that were shown in the newspaper referenced a survey that was done by the Society for Human Resources. The survey found that 60% of employers pulled credit reports in the year 2009 and 42% in year 2006. There was an increase of almost 50 percent.
What would you do if you had bad credit and at the same time no one wanted to hire you because of your bad credit?
I personally think this is discrimination and there should be a law suit filed against employers for discriminating against people because of their credit report.
If the person is qualified to do the job and for whatever reason they have a bad credit, that should not be the deciding factor to hire the employee. A great way to help everyone including the employer to have a great employees could be to offer Financial Education Services to its employees.
There is good news though. This practice has banned in WA and HI. Congress is looking at a pending bill to ban credit reports from being used for selecting a candidate for the job. The bill pending in congress has an exception for people working in the financial industry like mortgage, financial planning etc and some government jobs.
Being in the financial Industry as a Certified Credit Counselor I would like to suggest certain tips that can help people with bad credit and how they can establish a good credit rating.
Tip #1: Effective Use of The Credit Cards: When using your Credit Cards keep in mind that it is money that you owe someone. The credit card companies have allowed you to use their money to be able to buy the things you want and need. There is a great way to maximize the use of the credit cards and even take advantage of the credit cards. Make use of the reward program that so many credit card companies offer. Remember to pay off the entire balance of the credit card every month to maximize the benefits of the credit card rewards.
Tip #2: Use only 27 percent of the available credit limit: This is critical. Anytime your balance on the credit card goes above 27 percent it can impact your credit negatively. So for instance if you have a credit limit of $5,000.00 make sure to use only $1,400.00 maximum.
Tip #3: Never close any Credit Cards: This is very important. Your length of credit history and the total available credit limit is a big factor in the calculation of the credit score. If you close a credit card account that you have had for so many years not only are you going to lose the history along with that credit card account you are also going to reduce your available credit limit and this will hurt your credit score drastically.
Tip #4: Pay all your bills on or before the due date: Payment of your bills has a huge factor on the credit score calculations. Paying your bills on time establishes your credit worthiness and based on which everyone do business with you. This also reflects on your personal life. Many employers are pulling the credit reports to see how you personally manage your life and managing finances a great reflection on your inner life. If a person can manage things in life well, they will be responsible at the job as well.
Tip #5: Start with a Plan: If you are looking for ways to improve your credit let me share a very effective plan to get started. First if you don't have a credit card, get one. A good number of credit cards to have is 2, in addition to a home mortgage and a car loan. Understand that there two ways to get credit cards if you need one, secured credit and unsecured credit card. Banks will issue you a secured credit because you either do not have a credit history or have bad credit. It is issued based on the amount of the deposit you are willing to secure against the credit card. I personally would only go to banks that will give a credit limit equal to the amount of your deposit.
The other way is to apply for a credit card that works with a direct deposit from your employer. The bank will issue a credit card directly attached to your checking account instead of debit card as many banks issue and based on the credit limit set you will be able to use the credit card.
Every time you use the credit card, even though the money is being taken out of your account, it is reflected as a credit transaction and it is reported to the credit bureaus and reflects on your credit report. It is a good way to get started. On my website is an Unsecured Credit Card that would provide you this type of program.
One important thing to remember, which is unfortunate, is that a lot of businesses make money from people who are not able to manage their finances well. As you already know people with bad credits most often end up paying much more than the person with good credit and in turn end up saving nothing. Having an excellent credit will allow you not only to save money by paying lower interest rates but also boost your personal confidence. When you are suffering with bad credit you may have to use the services of a company that can help you establish your credit, you may have to file a bankruptcy, do a loan modifications, pay higher interest rate on car loans, insurance rates, mortgage interests etc. Do You understand where having a bad credit can lead you to? You can stop this now.
Hoping that you are excited about what you learned and you will take action to improve your credit situation as well personal financial situation.
About Author / Additional Info:
Get your credit report and score improved. Use one of the Best Financial Education Services company in the market and http://CreditRepair.AshwiniJindal.com/?t=Job.
Ashwini Jindal is a Credit Repair Consultant with Financial Education Services. http://creditrepair.ashwinijindal.com/LCP.html/?t=Job