3 jobs that can be harder to get with bad credit
Are you in search of greener pastures or simply feel ready for a new career challenge? If so, it doesn't hurt to have good credit, as some employers pull a version of applicants' credit reports during the application process as part of a background investigation. For jobs that require federal government security clearance or access to government facilities, for example, pulling a credit report is a must. And when that credit report gets pulled, it had better be spotless (learn how to make sense of your report here), lest you lose out on the job due to your poor credit history.
Here's a look at some jobs that require solid credit in order to get your foot in the door.
1. Security clearance jobs
Military personnel, IT professionals ... a lot of jobs require government security clearance, and if you're applying for one, a credit report check is generally going to happen. Though your overall credit or FICO score is not relevant to an adjudicator for a background investigator, Marko Hakamaa, contributor to security clearance career networking site ClearanceJobs.com said via email, "your history of being financially responsible and paying as agreed upon legal and just debts" is important. The reason: "This is a reflection of a person's honesty and trustworthiness," he said.
If that's not enough reason to work on building your credit, Stephanie Benson, general manager of ClearanceJobs.com, added that "regular credit reports will also be pulled for current clearance holders as a part of the continuous monitoring process." So if you've let your credit slide, now's the time to get things in order.
2. Financial broker
Your good credit history is more than a ticket to lower mortgage rates and travel reward credit cards. It can also help you score a career in the high-stakes world of finance. That's according to the Financial Regulatory Authority (FINRA), which requires prospective applicants to be vetted. FINRA was unavailable for direct comment, but a notice issued in March 2015 says:
"FINRA Rule 3110(e) requires that each member firm ascertain by investigation the good character, business reputation, qualifications and experience of an applicant before the firm applies to register that applicant with FINRA and before making a representation to that effect on the application for registration."
Information disclosed on the organization's Form U4 is used to help determine whether an applicant should be disqualified or may present "a regulatory risk for the firm and customers," FINRA adds. "Firms also may wish to consider private background checks, credit reports and reference letters for this purpose."
3. Mortgage officer
Though Joe Parsons, senior loan officer at PFS Financing in Dublin, California, has never heard of anyone being denied a license solely because of their credit, he does "think regulators are looking for evidence of fraudulent activity that might show up on a credit report as judgments," he said via email. So, yes, mortgage loan officers are licensed today under the National Mortgage Licensing System and part of that process involves a criminal background check and credit report, Parsons said.
The keys to great credit
When applying for the jobs we've listed, you'll want your credit to look as polished and professional as your resume. So how do you do it? By paying attention to how your spending habits impact your credit -- you can view two of your credit scores for free on Credit.com -- and understanding what it takes to build solid credit. Here's a quick look at what goes into your credit report.
Payment history: Also known as your payment performance, your payment history is worth 35 percent of the points in your credit score and refers to the record you've established of paying bills on time. If lenders report that you've missed a few bills to the credit reporting agencies, you can guarantee that information will go onto your credit report -- and ding your score.
Amount of debt: Credit utilization -- that is, the amount of credit you're using compared to your total available revolving credit limits -- accounts for almost 30 percent of the points in your credit score. So if your debt is closing in on that credit limit, or worse still, exceeds it, your credit may be in trouble. Remember, the lower your ratio, the higher your score. Other debt, such as open or installment debt, can also negatively impact your credit if you aren't managing it responsibly or it's excessive.
Types of accounts: From student loans to credit cards, it's helpful to have a healthy group of accounts (also known as a "credit mix") in your credit report. In fact, whether or not you have a variety of accounts can affect nearly 10 percent of the points in your credit score.
History of searching for credit: Worth 10 percent of the points in your credit score, this section of your credit report assesses your history of inquiries, or what happens anytime someone pulls your credit report. When you apply for a loan or pre-qualify for a mortgage, for instance, an inquiry posts to your credit. If you go shopping for credit a lot, you'll likely be considered a high risk to lenders.
Age of accounts: Some people like to say age is nothing more than a number. But in the world of credit, it refers to the age of the information in your credit history, and it matters a lot. Worth 15 percent of the points in your credit history, the older your history, the better your score.