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Tuesday, June 17, 2014 |

How to Improve Your Credit for Job Interviews

Recent College Graduates are still basking in the glow of their commencement ceremonies, but the next challenge for many will be hitting the job market.

Interviews remain competitive, with employers going to great lengths to qualify their candidates, including a review of an applicant’s credit report. Employers are mostly concerned if an applicant has a very bad credit history, as it’s a sign of poor financial management that may spill  into work life.

 

credit-report-request

Even if you are still in college now, it’s worth taking steps to improve the limited credit available not only for long term financial benefits but also for jobs. Here’s how.

Know your lines of credit: A line of credit is an extension of credit to an individual, usually from a financial institution, and may come in many different forms. Credit cards, car loans, mortgages and student loans are all different lines of credit that may be available. In general, a college student or recent graduate may only have a student loan and perhaps a credit card but as time progresses, new lines become available. Having multiple lines of credit that are being successfully managed is a simple way to improve credit and demonstrates the individual can handle their financial obligations.

Use a college credit card and pay it off immediately: Average national credit card balances have been in decline in recent years and most college students have less than $1,000 outstanding by the time they graduate. Students would be wise to simply use their credit card for school necessities, and focus on paying them back as quickly as possible.

Begin student loan repayment before graduation: Following a disciplined approach to student loans includes beginning repayment before graduation. Even just $25 per month is enough to make a difference.

Review a copy of your credit report: Before going on many job interviews, pull a free credit report and take a look before the employer does. You can go to AnnualCreditReport.com to take a deeper look and catch any potential errors. If this is your first experience in dealing with a credit report, it may be very simple as a young person’s credit history is limited. However, this is good practice to raise financial literacy about an important subject.

Look for errors on the credit report: Credit reports may be carrying errors due to data entry mistakes. Additionally, when a free credit report is requested, the credit bureau pulls data from an array of sources to piece together a profile. If the applicant has been inconsistent with their personal information on credit applications, like name variations or different addresses, there are chances  errors can occur. Other common errors include issues of identity theft, outdated information or other data errors as reported by creditors. That’s why it’s so important to pull the report, review it and confirm accuracy.

Start fixing errors right away: There are two ways to deal with errors on a credit report. One way is through the credit bureau. The other way is through contacting the company that is reporting your credit information, like a credit card company for example.

  • Correcting errors with the credit bureau agency: EquifaxExperian and TransUnion all have credit dispute and correction options available online. However, not all errors can actually be fixed by the credit bureaus. They rely on information from companies that report credit information. However, since it’s the actual credit report that is used for job screenings, it’s important to clarify any issues that can be fixed, usually regarding variations of name or home address.
  • Correcting errors with a credit granting company: If a company is providing erroneous information about you to a credit bureau, resolve the issue directly with that company. First, know exactly what error is showing up on the credit report. Then, contact the company reporting that error to review this information and verify what their records are showing. A written notification may need to be sent to the company to settle the matter entirely once all the facts are verified.

Starting early is really the key to fixing credit reports before job interviews: It’s easy for errors to show up on a credit report, but it may take more time than you would like to fix them. By reviewing credit reports early, enough time is available to resolve any errors well before a job screening has a chance to view it.

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Ken O’Connor is a financial aid expert and the director of student advocacy at cuStudentLoans.org. Learn more about credit union private student loans and college planning by visiting his blog.


 

 

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