How Bankruptcy May Affect Job Search

Bankruptcy could affect your future job prospects.

When you apply for a new job, you may be subjected to a credit check. If you filed for bankruptcy in the past, this will appear on your credit report and could affect whether or not you are hired.

Facts

A 2006 study by the Society for Human Resource Management concluded that 43 percent of all employers run a credit check on job applicants.

Time Frame

A bankruptcy can remain on your credit report for up to 10 years and will affect your credit score until it is removed. Thus, a past bankruptcy may have an impact on your future employment prospects until the reporting period expires.

Features

Employers review applicants' credit reports to verify that they are hiring a responsible individual and someone who does not have a high amount of outstanding debt. An individual who is late on his bills may be more tempted to steal from the company.

Misconceptions

A bankruptcy may not necessarily cost you a job. By using bankruptcy as a tool to manage or dispose of your debts, you become less of a theft risk to the company, possibly increasing your chances of being hired rather than decreasing them.

Considerations

Bankruptcy should not affect your current employment, as your current employer has no just cause to pull your credit report.

References

• MSN Money: How Bad Credit Can Cost You a Job
• Cardreport: Fair Credit Reporting Act (section 605)
• KOLD News 13: What to Know About Pre-Employment Credit Checks

Resources

• Bankrate.com: Life After Bankruptcy
• Americans for Fairness in Lending: Credit Reporting and Scoring
• Federal Trade Commission: Credit Repair--How to Help Yourself