High Credit Scores Give Consumers and Job Seekers Leverage in a Weak Economy
As the economic climate continues to get worse for most working Americans, debts are mounting along with the overall cost of living. It’s tempting in times like these to let a payment slip on a credit card or simply overlook a few months of cable bills, since you know it takes them awhile to actually threaten you with turning off your service. And medical bills…if you’ve already received the treatment, then why pay in a timely manner?
Unfortunately, as loans and credit are becoming more difficult to obtain, keeping your credit score high and your credit history unblemished are some of the most important things that you can do. And if you’re able to do that, you are in a position of strength when dealing with banks and other lenders.
Even in the current credit “crisis”, banks still need to lend money to make money – and consumers with good credit ratings are their best possible customers. If you’re maintaining a strong credit rating in this lending environment, you actually have some leverage when dealing with banks and credit card companies. You are more valuable to them now than you were at any time in the recent past.
If you’re shopping for any type of loan or even a credit card and you know you have a strong credit rating, then don’t hesitate to ask for a better rate. In fact, you should always get at least 2 rate quotes before deciding on any particular lender.
Consumers with good credit are becoming increasingly scarce. If you’re one of them, make the lenders earn your business.
The same concept holds true for job seekers whose employment screening process involves a credit check by their prospective employer. Many employers are now making employee-approved credit checks a mandatory part of the hiring process. If you have a high credit score, you have an immediate advantage over other job seekers who don’t.
Maintaining a high credit score is easier said than done, especially in today’s economy. But if you are able to do it, you can be rewarded.
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6 Responses to “High Credit Scores Give Consumers and Job Seekers Leverage in a Weak Economy”
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I find that this is becoming ever more common even when positions do not require access with finances. It has been standard for some time within the financial services community to run credit checks, but we have found the increasing frequency especially within the management positions we recruit for. Clients use the check as an indicator of personal responsibility as well as a sign of character. I understand that people sometimes get into financial trouble, however companies are broadly applying the results of credit to be a strong indicator on how someone handles their life and therefore their job responsibilities. Do you agree with this process?
Assuming the check has been agreed to by the applicant, I don’t have a problem with it. My concern would be that the people reviewing the credit reports actually understand the factors that may be impacting the final score. There are myriad reasons why a person with the utmost “personal responsibility” and “character” may have a less than stellar credit report. Among them, co-signing for a friend or relative that may have defaulted on a loan. Bottom line is that it is a tool to be used for assessing candidates, but it must be thoroughly explored in order to be effective and useful, in my opinion.
I agree. Your comment on the varying reasons for credit history bumps is ever so evident in a situation I am dealing with now. Current candidate is strong financial services professional coming to the area. Recent divorce in the last few years and credit history went from solid to south quickly during the process. Obviously not representative of his character as the overall history is good. However, score is low and working in financial services and new to the area is causing him some major obstacles with new positions he has been applying for. I think with any tool, there needs to be an understanding of what the tool is showing you and how it arrived at the conclusion that it has. Using them without contemplating the information and utilizing common sense is what makes tools like this dangerous.
While credit checks for potential employees has some merit, I’ve talked to several people who were eliminated from the running for a job because of their credit reports, and in each case, they had been targets of identity theft in the past. – And what about the person who had troubles in their youth (sound familiar?) and are now working on improving themselves… sounds like a classic Catch-22.
I think you’ve touched on the primary concerns that most people seem to have with using credit reports as a screening tool. It’s important that people look beyond the numbers and assess each case on an individual basis.
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