If you know your résumé and cover letters are stellar and you perform well in employment interviews, in addition you keep falling short of your goal to be hired in your chosen profession, your credit score/credit report could be holding you back. That is because employers view your credit score as a measurement of how well you fulfill all the financial promises that you made to lenders. It is a known fact that employers want employees with integrity, character and enough social skills that they will fit in well with the employer’s existing team. That is in addition to plenty of industry experience. You could also be held back by the results of a criminal background check, but typically you would know if that were the case.
The average credit score in the US is 705. An excellent credit is any score above 739. If your goal is to obtain employment in a profession that pays well, you should be aware that every employment application that you fill out typically authorizes employers to check your employment history, references, background and credit report. locaiongs with more responsibility and higher compensation automatically require a more extensive background check, credit check and criminal background check. If the final two or three candidates are otherwise equal, results from a background check, credit check or criminal records check often makes the hiring decisions easy for the employer.
Here are the best ways to enhance your credit scores:
- Always pay all your bills on time, or preferably early. This is the highest weighted factor in calculating your credit score.
- Start an automated savings plan so that you pay yourself first every month and live on the remainder. This can be done by setting up automatic deductions from your paycheck to your 401K/IRA/403B etc. or using the automated bill pay service with your online banking to contribute to a savings or retirement account each month. People with the discipline to keep six months of living expenses in a savings account are typically able to continue an excellent credit history and make better financial decisions.
- Keep your credit utilization rate under 30% vs. your credit limits; if possible, a 10% credit utilization rate vs. your credit limits is ideal.
- In many situations, especially if you have consumer debt with high interest rates, you can use the equity in your home for a debt-consolidation loan (pay off debt with a cash-out refinance/home-equity loan). In many situations, this will enhance your credit scores dramatically, but you must have the discipline to keep those credit card balances at zero by paying off your consumer debt each month.
- Do not close down the credit cards/credit lines that you paid off, already if you will not use them anymore. The more open credit you have and the lower your balances on same, the better your score will be. The older your open credit lines are the better it is for you (stability).
- continue stability in your job, profession and address. Frequent changes in your profession, job or address often rule to financial difficulties/unemployment because without stability you are a less desirable candidate for credit or employment.
- Work a part-time job evenings or weekends to pay down your debts faster. Pay down the debt with the highest interest rates first for maximum impact.
- If you have had financial struggles and you have the debts to prove it, write and ask your creditors to agree to remove your late payment record in exchange for paying off your debt in complete. Let them know that if they do not agree to this in writing, you will have to focus your repayment efforts on other creditors who are friendlier because you have such limited resources.
- Analyze your credit records carefully from each of the three credit bureaus because there may be mistakes that are holding your score down. These mistakes could be as minor as old late payments that are nevertheless on your credit history already though they are over seven year old. Follow the directions to argument credit reporting errors carefully. Each agency has their own policies and procedures. I recommend you use certified mail with a return receipt on all harmonies, so you have official proof of delivery. If one of your creditors fails to respond within a reasonable time, you will automatically win your argument.
- Avoid bankruptcy whenever possible, including reorganization of debts bankruptcy because both are a public admission that you are financially inept. Everyone knows Lawyers are expensive and frankly, you could put that money toward paying off your debt and get a second job to accelerate the time of action of paying off your debts. Regular consumer debt with late payments will drop off your credit history automatically after seven years. A bankruptcy remains on your credit report under public records for ten years and many employers prefer not to hire candidates who filed bankruptcy.
- Do everything possible to earn a promotion or raise at work, which will help you pay off your debts faster. If you are overdue for one, present your boss with an irresistible written proposal to make your raise or promotion a reality.
- Hire a CPR or Tax Accountant to maximize all your income tax deductions. Yes, they are worth it because they typically generate more savings than their fees and you will learn from them!
- Hire a Certified specialized Résumé Writer if you think that you are underpaid or ready to improvement and test out the job market in your spare time. Passive candidates are greatly preferred by employers and in many situations, they pay up for them.
- Get married, find a great roommate or rent a room out in your home to a college student, artist or specialized to reduce your monthly living expenses.
- Whenever possible, use public transportation in lieu of owning a means and paying for car insurance. The cost savings is staggering, especially if you have to pay to park regularly.
- improvement your education or skill set whenever possible, that way you will be more in need in the event of a layoff and you will improvement/receive pay increases faster.
- Ideally, it is advantageous to have two credit cards, a means loan/bank loan and a mortgage because this shows that you are responsible enough to have three major types of credit.
- Resist the urge to splurge! aim yourself to be a saver not a spender by repeating this mantra, “Use it up, use it out, make it do or do without.”
- Request a free copy of your annual credit report every year from each major credit bureau. Search for “Annual Credit Report” with Google for the only online source of free consumer credit reports from all three credit-reporting agencies per federal law.
- If any of your creditors have not reported your timely payment history, write to them and request that they report your good payment history to at the minimum one of the major credit bureaus.
- Use the online bill pay characterize of your checking account to set up automated monthly/bimonthly payments for all of your debts. This way you will not forget if you have a car accident, mishap, long vacation or are hospitalized. An ounce of prevention is worth a pound of cure.
- Have some kind of Hospitalization insurance in the event that you are hospitalized with an illness, injury or sickness. AFLAC has several consumer friendly insurance options including one that pays you an income while you are hospitalized.
- Avoid divorce if humanly possible, a healthy percentage of couples truly end up loving each other again after a separation. If you must divorce, I recommend using Divorce Mediators instead of Divorce Attorneys because you will assistance from a more amicable course of action, a more advantageous divorce settlement and meaningful cost savings.
- Avoid co-signing any car loans, student loans, personal/business loans or mortgage loans/home equity loans for friends or family.