Be Honest and Come Clean About Bad Credit History

Hi Lily, I was recently denied a job after authorizing a pre-employment credit check which uncovered that I have had some collections. Most of my experience is in Financial Services so I'm thinking I'll probably run into this issue again. Due to the length of time I've been out of work and my dwindling financial resources I can't pay off these old accounts, do you see any way to tactfully mitigate or disclose adverse credit history, when applying for positions?

If you are seeking a job in the financial services field, your credit history will continue to hurt your chances for employment. From the perspective of an employer, a record of collections might indicate that you do not have the business acumen a financial position demands, that you might be irresponsible with accounts, or, what's worse, that you might even be tempted to steal. For jobs in the federal government, bad credit history also classifies you as a potential security risk.

By now, it is hopefully widely understood that people fall on hard financial times and end up with poor credit for any number of reasons unrelated to their professional abilities or honesty. Yet, in the application process, when relatively little can be known for certain, credit history remains an important factor for many employers hiring financial professionals.

According to a Society for Human Resource Management Survey, 35 percent of employers investigate the credit history of job applicants. Unless you are applying for jobs in banking, securities trading, or government, however, you are likely to come across prospective employers who will not check your credit history. If the organization you are applying to is on the smaller side (less than 100 employees), the chances are even better that they will not bother with the credit check. So, one approach you could take would be to strategically limit where you apply so that you lessen the odds of being excluded due to your credit history.

You could also just plan to come clean about your financial problems. When it becomes clear that the prospective employer is going to run a credit check, explain your situation and the circumstances that led to it. Perhaps you went into debt because of an illness in your family or some other contingency that was wholly out of your control. Without getting into inappropriate personal details, you should make this known. I suggest writing a concise letter stating that you have anticipated the concerns that employers might have about hiring a financial professional with a credit history such as yours, but that you can provide every assurance, as can your professional references, that your credit history is no indicator of your character or ability to perform well in the job.

It would help your case tremendously if you could also demonstrate that you are doing what you can to settle your debts. If you have not done so already, contact Consumer Credit Counseling Services (http://www.cccservices.com/), a non-profit organization that can help you to negotiate repayment plans with your debtors and change the status of your accounts for the better.

Lily Garcia has offered employment law and human resources advice to companies of all sizes for more than 10 years. To submit a question, e-mail HRadvice@washingtonpost.com. We reserve the right to edit submitted questions for length and clarity and cannot guarantee that all questions will be answered.