The Relationship between Job Status and Credit Status

Creditors like consumers who represent stability and responsibility. Those who live in their own homes for an established period of time are considered better risks than the renter who flits between apartments regularly. The same principal applies to job stability with those who are settled being preferred to the flighty.

Certain jobs even carry more worth in the eyes of creditors too, thus those who are well educated and have professional jobs are deemed less risk than blue collar workers. They can benefit from preferential interest rates and insurance premiums. Whilst the brainy professor may struggle to put air into his car tyres, he is likely to be offered a lower insurance premium on his auto than if he was the person replacing the tyres.

Credit and job applications are a sore subject for many at the moment who are increasingly seeing no hope of obtaining employment due to low credit scores. Regardless of how they came to have low credit, employers who choose to pull credit reports prior to extending a job offer are influenced by credit reports. Whilst legislation is pending in many states to put an end to this practice unless a credit report is relevant to the job position on offer, such as a role in finance, employers use it to make decisions as to a person’s character.

A correlation is surmised that those with poor credit reports are less responsible and will reveal this in bad time keeping and even an increased risk of workplace theft. This is not borne out by any research. The practice continues although a small number of states have already banned it as an invasion of privacy and unethical. At first the credit agencies denied selling reports onto employers but now accept they do so. However even the representative of Trans Union agreed there was no substantive link proved between having bad credit and job performance.

Those with excellent credit are considered better risks by creditors, insurance companies and employers. Income is not relevant as having a high income is no indication at all that one is actually responsible with money. Here the credit report comes into its own as it establishes a pattern of either good money management skills or lax decisions and behaviour. Those who pay their bills late and live beyond their means will be let down by their credit reports. Living beyond ones means is a red flag to employers who consider it more likely an applicant will commit work place fraud.

There is no hard and fast rule. The professor who has demonstrated a stable life and employment record can still be let down by his credit report if he periodically forgets to pay his bills. The blue collar worker who lives within their budget and pays their credit card bill responsibly will have an excellent score.

However all things being equal the fact remains that those with good steady jobs who pay their bills on time and live within their means will be judged by that when their credit report is checked. Many professionals do carry increased job security which lessens the likelihood of job loss which would then impact negatively on finances.