If you’re like most people nowadays, you probably don’t even consider that a poor credit score can affect your ability to get hired at a desirable job (unless you have learned this lesson the hard and frustrating way). Even if you did know this, you probably didn’t know that losing a job or job-hopping can affect your credit score in a major and negative way. There is a massive interconnection between bad credit and bad job history; one leads to the other and vice versa. Let’s get familiar with both sides of the issue to learn how to break the vicious cycle!
Bad Credit –> Bad Odds for Getting Hired
It might not be something that you would even consider a potential employer would look at when applying for a job (unless you are trying to work for a financial institution), but credit can play a role in what can decide your fate as a job candidate.
A credit score is a numeric representation of decision-making skills on some level, so what bad credit signifies to employers is a lack of consistency on your part. Not being able to pay bills on a regular basis leads to bad credit, meaning that you might not be able to show up to work on a regular basis or complete your job responsibilities with consistent excellence.
And while this might all come as surprising, the opposite is true as well: losing your job can negatively impact your credit score.
Losing a Job –> Losing Good Credit
Being unemployed is tough on many levels: mentally, emotionally, and certainly financially. It becomes increasingly difficult to make bill payments on time after losing a job, which will negatively affect your credit score.
Something else that can slightly impact your credit score in a bad way is unemployment benefits. This is sometimes a necessary option for people after losing a job, but reaping unemployment benefits actually are reflected in credit score. If this is something that has to occur, make sure to use these benefits only for the minimum amount of time.
Job-Hopping –> Credit Bubble Popping
Job-hopping can be just as detrimental to your credit score as losing a job. Although there are some positives to job-hopping, we are examining this from a credit score standpoint.
Employment history is something that is taken into consideration on your credit report. If there are several gaps in time with no employment or lots of different jobs in a short amount of time, you look very unreliable to a lender and will hurt your chances of being approved for any type of loan. Ever-changing employment means inconsistent income, and the lender can’t get a good read on what you would be able to pay reliably.
Leaving jobs too soon also makes you look like you have commitment issues. Yes, these do exist outside of relationships.
What Do I Do?!?
Say to yourself the following: “I need to be an expert about my credit report and my credit score!”
Sure, this sounds simple, but it is the first and most effective step to ensuring your credit and job security. You’ve already read how interconnected and important both a stable job history and stable credit report is to being successful in either arena. Constantly keeping yourself up to date with your information will not only keep you in check with your spending habits but maybe help you make more long term career choices and hold yourself accountable where you need to be.
