Can Bad Credit Keep You From Getting a Job?

by Dana George | Updated Aug. 27, 2022 - First published on Sept. 11, 2020

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A man and woman sitting at opposite ends of a table in an office meeting room for a job interview.

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If poor credit is part of your history, here's how to show an employer it will not be part of your future.

Can bad credit prevent you from getting a job? The short answer is yes, particularly if you're up for a job that manages money. Even if your credit is shot, don't count yourself out just yet.

Know what's in your report

Most of us run into financial challenges at some point in our lives, and the worst thing we can do is hide and wait for those problems to go away. Many employers don't carry out credit checks, but some do. And if you are job hunting, it's important to face your situation head-on.

The first step is to order a copy of your credit report so you know what a potential employer might see. The three major credit bureaus (Equifax, TransUnion, and Experian) have made free weekly credit reports available until April 2021. All you need to do is go to and request yours.

Comb over each report, looking for errors. If there are any inaccuracies, report them to the agency in question. They are required by law to either verify the information or delete it from your report.

Now that you've seen your credit report in all its glory, bear in mind that the employer won't see everything. The report it receives is more like a Reader's Digest version. It contains only the most pertinent information that might be a cause for concern, such as a bankruptcy or history of late payments. Your actual credit score is not included.

Manage the situation

Credit checks don't just come out of the blue. According to the Fair Credit Reporting Act, a potential employer must inform you if your credit report will be used as part of their employment decision. Legally, you need to agree to the credit check in writing (the same goes for a background check). Your potential employer has to give you the opportunity to not only review the report but also explain or dispute any negative points.

Here are three ways you can get in front of any potential problems:

1. Convince them you're the best candidate for the job

Before the issue of a credit report even comes up, create a resume that highlights your expertise in the required skills. Go into the interview ready to explain why you are the best person for the job. The initial impression you make is likely to serve you well when it comes time to explain credit issues.

2. Create a plan

Your credit report lists everything from your personal information to lines of credit in your name and any missed payments or delinquencies. As such, you won't be able to fix negative information overnight, especially as late payments can stay on your report for seven years. However, it's still a good idea to come up with a specific, step-by-step plan to improve your credit. For example:

  • Rework your budget to cut unnecessary expenses
  • Catch up on overdue bills
  • Pay off debt, a practice that allows you to tuck more money into a savings account each month
  • Use a credible credit boosting service, like Experian Boost or UltraFICO™
  • Avoid further problems by building up your emergency savings

3. Be prepared to offer an explanation

Once you learn that an employer plans to run a credit check, ask for a moment to explain your situation. If your financial troubles are due to a job loss, divorce, or unexpected medical expenses, let them know.

Be aware that a potential employer will use your credit report to understand what type of an employee you might be -- which is different from a company that might lend you money. If you have a lot of debt, for example, an employer might consider you a higher fraud or theft risk. If you would be in charge of managing the company's money, a history of missed payments does not bode well.

Show how serious you are about taking control of your finances by offering a short, precise statement. It can be as simple as this:

My spouse lost his job in November and spent six months searching for a new position. In the meantime, my income was insufficient to pay all the bills on time, and our credit suffered as a result. We now have a specific plan to rebuild our credit, including paying off debt and building an emergency fund so that we don't get behind if another crisis hits.

It may feel awkward to share so much information with someone you don't know, but in this case, honesty really is the best policy.

Accept reality when necessary

Companies hiring for some positions -- like corporate accountants -- may be less able to overlook past financial problems. If you are applying for one of these positions, you may need to take another job until you can get your credit in shape.

Even if that's the situation you find yourself in, there is a silver lining. Your credit history can impact many aspects of your life, so the time you invest in strengthening it will never be wasted.

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