When looking for a new job, you know you need to have your resume up-to-date, applications completed, and be prepared for any interview questions that may come your way. But did you know that your credit score may actually affect how future employers see you?
While it may not be the determining factor in your employment, it can bring up some warning signs that may hurt your overall chances. As you go on the job hunt, here are a few important things to keep in mind.
What Is a Credit Score?
So, what is a credit score and what has an effect on it? Simply put, a credit score is a number calculated from your credit history. Your 3-digit number is then used to depict your credit risk. Specifically, the lower the credit score, the higher the chance a loan officer may see an opportunity for missed payments or other constraints on your financial accountability. This can greatly influence your capacity to take on future loans for the down payment on a house or new car and will also affect your interest rates going forward.
To take a deeper look, your credit score is broken down into 5 main categories:
- Payment History (how frequently you were able to make payments on time): 35%
- Amount Owed: 30%
- Length of Credit History: 15%
- New Credit: 10%
- Credit Mix (credit card debt, loan debt, and other outstanding balances): 10%
As you can see, your credit score can actually reflect the balance you may have in other areas of your life.
Finding the Proper Balance
This balance is what employers are looking for. It shows financial responsibility, as well as initiative to keep your own life in order. This is extremely important to employers because they want to make sure they aren’t taking on too much risk when hiring.
You may wonder how transparent is your credit history to future employers. Should you be worried?
The Fair Credit Reporting Act was put into place to stop future employers from looking directly at your credit score. They do, however, get the opportunity to look at a credit report. You may even notice that most job interviews require your consent on initial applications to do so. So, in order to even get your foot in the door, being honest about your credit history is extremely important.
Always Room for Improvement
Before you begin worrying about your credit score, make sure you know where you’re starting. Ask for a free copy of your credit report so you can set the bar for future growth.
Once you have the credit report in hand, where do you begin to make changes? As mentioned earlier, 35% of your credit score goes to payment history, so making on-time payments is the fastest and easiest way to improve your score. Be sure to set reminders on your calendar, on your phone, and other places you check frequently. Some payments can even be set up automatically. With this simple step, you’ll be able to raise your credit score in no time.
No matter where you are in your current credit journey, Mercer Savings Bank has the information you need. We have a fast loan process and easy payment methods to fit your busy lifestyle, and offer financial products and services that make your life easier and your money work harder for you. You can trust Mercer Savings Bank as your all-in-one loan center. Talk to one of our personal loan officers today to learn more about how to improve your credit score.