After years of pulling off all-nighters and typing ‘til your fingers cramp, your hard work finally paid off. You graduated, so some congratulations are in order! Now with a freshly printed diploma in hand, you’re ready to start a new chapter in your life: your career.
This is an exciting time in your life, but it’s also a stressful one. Your job search doesn’t always go as well as you planned, and it can be a challenge to find work in your field.
Between a flood of other grads looking for work and a finite number of jobs available, you already have enough obstacles. Don’t let your credit history be another barrier to starting your career.
Not sure how your history can impact your job, let alone what it is? Keep scrolling to find out more.
What is Credit History?
Your history is a record of the money you borrow that summarizes what you’ve taken out and how you pay it back.
Generally, if you took out a student loan or personal line of credit during college, these products may show in your history for up to seven years. But it depends on your financial institution.
Some financial institutions like CreditFresh may report your payment history to one of the reporting agencies. You can stop by CreditFresh to see how they work with TransUnion to share this kind of information.
Do you pay your bills on time or do you regularly miss payments?
The answer to these questions helps TransUnion and other reporting agencies translate your borrowing history into a three-digit numerical score.
Some financial institutions may look at this score to see what kind of borrower you are.
The higher your score is, the more likely they will approve your application at more affordable rates and terms. The lower your score is, the more complicated borrowing becomes.
Why Does This Matter to Employers?
You’re used to filling out applications, writing up cover letters, and submitting your CV. But soon, you may also have to enclose a copy of your report.
An increasing number of employers will look at your report as a way to further narrow down their pool of candidates. This is especially true in positions where you handle large amounts of cash or confidential information.
What they see is an abridged version of your report and not your score, but it does give them a basic idea of the debt you have in your name and the payment history of each account.
Generally, a higher score will increase your chances of being hired. Nevertheless, a low score may not push you out of the running. You may be able to overcome your score by speaking candidly about why it’s low.
How to Impact Your History
Ultimately, having a higher score will make your job search easier, so you’ll want to commit to good habits that impact your history positively.
Impacting your history may be possible when you follow these four steps:
- Pay your bills on time
- Don’t max out your line of credit or credit card
- Space out applications for new loans
- Use credit in emergencies only — not everyday spending
Getting a job straight out of college is hard enough. Don’t make it any harder by neglecting your score. Commit to the tips outlined above, and you won’t have to worry the next time a potential employer asks to see your report.