Credit Report Errors More Expensive Than You Think

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Credit Report Errors or Derogatory Language Could Cost You a Job

For all the reasons you can imagine, errors on your credit report can be expensive.  They can keep you from getting important financing or increase your interest rate on loans.  In short, errors or misinformation can cause:

a.  Inability to buy a home, a car or get an education

b.  A reduced credit score requiring higher monthly payments for a home or car, possibly running to hundreds of dollars more per month

c.  Never-ending problems in the case of identity theft

But few people realize the credit report error can also cost you a job.  A Society for Human Resource Management 2012 Survey estimates that 47% of employers use credit checks when making a hiring decision.  Even if your position has nothing to do with handling money, many employers use your credit profile as an indicator of your level of responsibility or integrity. I know that in my industry, financial services, all employers use credit checks not only when they make a hiring decision but also on a regular basis as a checkup on their agents.  So a less-than-optimal credit report or credit report error can keep you from getting a new job, can keep you from getting appointed with an insurance company or losing an appointment if you’re an insurance agent or even get you terminated.

Here’s the rub.  You likely find out about a credit report problem at the most inopportune time such as when you need to borrow money or need to change jobs.  The remedy is to do an annual check of your credit report.  You might pick a date like your birthday or specific holiday to track your credit report which you can do in just a few minutes.  Every consumer can access a free credit report from each of the three credit report companies at annualcreditreport.com.

The key is to scan the report carefully.  Look for any errors or even misleading information.  For example, I had a lender use the word “suspended” regarding an equity line on my home.  In fact, the lender had suspended all equity lines in my state when housing values fell.  I had to take the lender to small claims court to get this wording changed which I did successfully.  So not only look for errors, but anything that might spook a lender or employer.

If you find errors or misleading language, contact the credit bureaus through their websites and simultaneously contact the financing institution that is reporting that tainted information.  If you can’t get the issue fixed in 2 to 3 weeks, don’t delay.  File a claim in small claims court is I did because you never know when you may be depending on a clean credit report for your next job or chunk of funds you may need.

Should you have a negative credit issue that cannot be removed from your credit files because it is true, it may actually be a good idea to disclose this on an employment application so you can frame the situation on the best light.  Should an employer find negative credit information when they do their background check, they won’t bother to ask you to explain.  They just won’t hire you.