3 Ways a Bad Credit Score Can Affect Your Career
Most Americans know that having a good credit score can positively impact different aspects of a person’s life. However, it appears that many young people are completely unaware of how a bad credit score can affect them. In fact, a survey has revealed that 68% of Americans make at leastone financial mistake before turning 30. The survey also indicates that more than 50% of respondents received their first credit card by the age of 21, but 72% received no guidance or education about handling their personal finances before entering college. As a result, the majority of young people are in debt before they hit their 30’s, leading to a credit score which can hurt their career.
How to determine if you have a bad credit score
Before taking steps toraise your credit score, it’s important to know about credit score ranges. The VantageScore model uses a scale of 300 to 850, and the scores aredivided into five groups.To be considered as having excellent credit, you must have a score from 781 to 850; good credit is from 661 to 780; fair credit is 601 to 660; poor credit is from 500 to 600, and bad credit is from 300 to 499. Bad credit can make life extremely difficult, from getting a job to applying for a loan, and even getting a cell phone contract.
According to a recent survey of 1,050 millennials, thewomen’s average credit score was 666compared to 661 for men, revealing that most young people have fairly decent credit scores at the moment. But there’s no room for error when making financial decisions. As the 20’s and early 30’s are when most people start their careers, it’s imperative to know that having bad credit can be detrimental to all aspects of your professional life. Here are 3 ways a bad credit score can affect your career.
It can hurt your job search
If you’re fresh out of college yet you’ve already amassed considerable debt, there’s a big possibility that your bad credit score can hurt your job search. Most organizations check job applicants’ credit as part of their standard background check. There’s not much that you can do about a credit check request other than refuse permission, but doing so can also mean that the odds of getting hired may have gotten slimmer.
It can hurt your chance of a promotion
Just because you’ve been working at a certain company for years doesn’t mean that they’re going to get lax about checking your personal information. If you’re in line for a promotion, most companies will check credit histories, especially if the promotion comes with a corporate credit card and if you’ll be privy to corporate secrets. Moreover, some employers think that having a bad credit score says a lot about a person’s sense of responsibility. You may get passed over for that promotion as your employer may think that your failure to manage an important aspect of your life can reflect on your job.
It can make starting a business even harder
If you’re planning to go the entrepreneurial route after you graduate, know that having a bad credit score can makestarting a business even more difficult. You may need a bank loan to fund your startup, and having a bad credit history can limit the amount you can borrow to get your business up and running.
Having a bad credit score can negatively impact your career, but the good thing is that you can make certain adjustments to improve it over time. Make good financial choices, pay your bills on time, don’t overuse your credit card, and refrain from applying for new lines of credit until your credit standing improves. Doing these may be a challenge for now, but you’ll be rewarded with more job opportunities and a better professional life once you’ve improved your credit scores.