Freedom Financial Asset Management: Credit Matters in Your Job Search

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Office chair with a FOR HIRE sign isolated on white background

 

 

Whether you’re a new college graduate or a seasoned professional, searching for a new job can be a daunting and sometimes scary challenge. You probably already know that you should be taking time to prepare a cover letter, ensuring that your resume is up to date, and buying clothing that gives off a professional vibe- but did you know that you should also be preparing your credit score and credit report for scrutiny as well?

According to a report by Freedom Financial Asset Management services, the number of employers who are requesting to see a candidate’s credit report is increasing by the day, especially in industries related to finance and accounting. An employer will want to look at your credit history in order to make an estimation related to your level of financial responsibility- they are looking to see if you are able to properly manage your own finances, and may be hesitant to give you the job if your credit history shows too many blemishes or missed payments. Though the importance of a credit check will vary by industry, Freedom Financial Asset Management has found that those searching for a management role within the banking industry or a government role should be particularly mindful of their credit history.

Luckily, if you’ve made some financial hiccups in the past, there are steps that you can take to step up your credit before a job search.

The first step to making sure that your credit history is prepared for employers to view is to know exactly what makes up your current credit report. Under federal law, you are entitled to one free credit report every twelve month period; you can pull yours from AnnualCreditReport.com. Comb through your current credit report, and dispute any unfair or erroneous items- under the Fair Credit Reporting Act, credit bureaus are required to remove disputed items if they cannot find verification of the items in question.

If your credit score is poor (generally, below 620), you will want to take steps immediately to begin improving it. Freedom Financial Asset Management indicates that making regular and on-time payments on credit card balances accounts for about 35% of credit score makeup. Paying student loans on-time and using no more than 30% of available credit are also great habits to keep.

If on-time payments alone aren’t enough to repair your credit score, it’s time to seek the help of a professional. Professional financial counseling can be particularly valuable if you are a new college graduate; Freedom Financial Asset Management has found that over half of new college graduates cannot define what a credit score is, and about half cannot identify a factor that contributes to the makeup of a credit score.

What if you have no credit history at all? The most reliable way to start your credit journey on your own is to open a secured credit card in your name, and use it with caution and responsibility. This type of card requires a cash deposit that will become the line of credit, but it’s important to know your spending limits, as these types of cards often carry high rates of interest. The best thing that you can do is to make small purchases on the card, for example a coffee or lunch, and pay them off immediately- this could help you to build credit in a low-risk environment.

 

 

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