Employment
Working: Debtors' Prison: As If It Weren't Tough Enough
Smart Money, October 2003
Diana Kritsonis has been looking for
work for more than two years now, struggling to raise three daughters on her own
in Renton, Wash., after losing her $75,000 job as a computer programmer. Her biggest
foe in landing a job? Lately, it's been her own debt.
Having racked up big bills on a variety of charge
cards while being out of work, Kritsonis is finding that more and more employers
are checking out her credit history. Whether she was applying for "anything" at
Costco, the appointment-setter job at the local hair salon or a tech job at the
University of Washington, her prospective employers wanted to know whether she was
paying her bills before considering taking her on. "My credit is hampering me in
finding a place to work," she says.
If you thought your finances were your own business,
think again. The cultural shift caused by Sept. 11 and the glut of accounting scandals
has firms double- and triple-checking every little thing about a job applicant.
And that can include a probing of your credit record as a measure of your trustworthiness.
Generally speaking, positions that involve access to money are the ones that require
a credit check. That could include everyone from CFOs and cashiers to customer-service
reps who handle credit
card orders and pretty much anyone in the financial services
sector. "If they can't handle their own money, I don't want them handling mine,"
explains David Cook, vice president of Alpharetta, Ga. based employee-screening
firm ChoicePoint Workplace Solutions.
But beyond finance-related jobs, you could still
have your debt history examined. "We're seeing it more and more," says Suffern,
N.Y., career coach Sande Foster. Even with volunteers. In Orange County, Calif.,
scores of Red Cross workers recently resigned en masse rather than have their credit
put under the microscope.
So how best to deal with a credit probe if you have
a spotty record? First of all, keep in mind that firms can't dive into your finances
without your permission. On your job application there will likely be a box to mark
off, giving the employer the right to conduct all manner of background checks. Of
course, refusing to comply, while within your rights, could stop the interview dead
in its tracks. Given that, here are a few tips:
Do your own background check. Almost everyone has
some debt in his life, whether from student loans or a mortgage. So it's not necessarily
your debt level screeners look for, it's how well you manage it. Moral of the story:
Make your payments on time, every time. Though repairing a poor credit score will
take years, at least you won't be driving it down further. Check for errors, too.
"Mistakes are made all the time on credit reports," says Foster. Contact credit-reporting
firms such as Experian, Equifax and TransUnion to find out for a fee of around $12
or $13 what they're telling potential bosses about you.
Object . . . nicely. If the position has nothing
to do with handling money, you could tactfully point that out. You might convince
the interviewer your credit is not relevant, especially since such a check could
potentially expose a company to charges of discrimination. "Women and minorities
tend to have lower credit scores than white males," says attorney and HR consultant
Wendy Bliss of Colorado Springs, Colo. "So employers have to be a bit careful about
what position they're requiring credit checks for."
Think preemptively. If you have a tarnished credit
record that an employer is sure to catch, discuss the circumstances with the hiring
manager up front. Maybe you had an illness in the family and you had to cover the
medical bills. In a tough economy, an interviewer will likely be sympathetic to
an honest, rational explanation. "You want them to understand exactly what transpired
in the past and how it's being corrected," says Foster. Save it for your follow-up
interviews, when you're close to landing the job and the potential employer is likely
to begin digging into your past.
Such candor paid off for Nicole Mussey in remarkable
fashion. Mussey, 24, had charged more than $18,000 after her mom fell ill with cancer,
putting "groceries, medical bills, everything" on her six cards. Bad credit tripped
her up more than once as she looked for work, including getting her rejected for
a job at a Kaufman's department store.
But when applying for a position as an intelligence
analyst at the National Security Agency in Maryland -- she'd received her master's
in international security -- she explained how she'd gotten into the credit mess,
and she had all the receipts for the medical bills to back up her story. She'd also signed up with a debt-management program, Consolidated Credit Counseling Services,
to start whittling down those bills. "I'd thought my
bad credit was going to mean
I could never get the job I wanted," Mussey remembers. So when the NSA called in
July to hire her, she says, "I just started bawling into the phone."
