Can Bad Credit Hurt My Career?

Dear Mary,
At a recent job interview, I completed the application, which included a form asking for permission to obtain my credit report. I was hesitant to sign because I’ve fallen behind on a number of payments since I was laid off six months ago. Can my bad credit score hamper my chances of getting the job? Is it even legal? Doug, Indiana

Dear Doug,
Yes, it is legal for prospective employers to request your credit report as part of the interview process. A credit report has become more than just a list of creditors. It’s a kind of character reference. Some employers want to see how a potential employee manages his life. If you are sloppy with your personal affairs, can they expect the same kind of sloppiness on the job?

These days, a credit report shows lots of things other than late payments. If you’ve been evicted, had a judgment filed against you, a tax lien or you have a civil action pending—all of that can show up. Does a potential employer have a right to know all of that? I guess you’d have to think like an employer to answer that question.

At any rate, making sure you keep your credit report as squeaky clean as possible is beneficial for many reasons. You should get a copy of your credit report to see exactly what’s on it. If there are negative, albeit true, entries, write up a simple explanation and have it available should a potential employer, landlord, even insurance agent (yes, they look, too) make a similar request. Sometimes a simple upfront explanation is all that’s required to get past that issue.

Dear Mary,
Last month, I lent my sister $500 to pay her rent since she said she was in a jam. She has yet to pay me back, but she eats out every day and gets weekly manicures. I’m seething. What can I say to get my money back? — Christy, Nevada

Dear Christy,
My business side says to just review the promissory note she signed. The “sister” part of me says you probably didn’t think you would need that. A written agreement makes sure that everyone has the same expectations—even sisters. As it is, you expected her to pay you back complete with a mushy “thank you” note. Her expectations? Who knows. She may think you’ve got so much money you haven’t even missed it.

I don’t blame you for being upset, but is $500 worth destroying your relationship? That’s what will happen if you let your anger turn into bitterness. You need to accept that she may never pay you back. Once you stop seething, say to her, “Let’s figure out a repayment schedule that’s comfortable for you.”

Do everything you can to work it out, and then write it down. If she ever pays you back, consider it a bonus. And the next time you decide to lend money to anyone, put your expectations in writing—before you write the check.

Do you have a question for Mary, or some advice for Christy or Doug? Let us know in the comments section below.