A statistic reported by Inc. Magazine could be troublesome for job seekers with poor credit scores. According to a survey cited by the magazine, about 60 percent of employers run credit checks on potential job applicants at least some of the time.
Given the high unemployment rate, this eye-opener about credit scores and jobs could be concerning for people with low credit scores, particularly those searching for jobs that require money management. An employer—fearful that a poor credit score is a sign of irresponsibility—might not offer a job to a candidate with bad credit.
If you have a low credit score and are searching for a job, fear not. Two rules can offset your low credit score.
Credit Scores and Jobs Rule #1: Be sure to highlight other areas of your life that demonstrate responsibility. Have you been entrusted with the position of treasurer for a nonprofit organization? Do you have a glowing letter of recommendation from a previous employer who charged you with tasks that required a tremendous amount of trust, loyalty, and responsibility?
Credit Scores and Jobs Rule #2: If you are able to show that you are trustworthy, your credit score might be overlooked, particularly if you explain the events that caused your bad credit. Your best bet is to be candid with a possible employer who is going to run your credit report. Since the recession has had unfortunate consequences for many people, the employer might be sympathetic to your plight. Pitch your situation as a learning experience so that you can show the employer that you are wiser as a result of your mistakes.
By taking serious steps to repair your credit, your credit report might indicate that you have had a shift in the positive direction. If you walk into a job interview armed with a the facts about your credit score, how you have turned over a new leaf, and what your credit report indicates about your current behavior, a potential employer might be sympathetic, especially if you have extenuating circumstances brought on by the recession.
Though credit checks for job applicants might create barriers in the already-tight job market, employers are also likely to value an honest account of your situation. When it comes to credit scores and jobs, be sure you are ready to be forthright about your past mistakes and able to offer evidence of your progress. In doing so, you allow employers to look past that three-digit number and offer you the job.
Category: CREDIT BLOG
Google+, Better Social Media
Did you hear that Facebook’s rival is in town? As I’m sure some of you know, Google released a new social media site called Google+.
If you haven’t received an invitation to join Google+, please let me know! The site is invite- only… and it’s amazing! Where Facebook lacks,
Google+ takes off.
For instance …
1) Google+ is fertile ground for you to build your business (or promote your job skills). It’s really easy to stand out because, unlike Facebook,
there aren’t bunches of people competing in the
same space.
2) The folks at Google+ are ultra-sensitive about privacy issues, so they don’t capture the same personal information that Facebook does.
3) It’s really, really easy to separate friends, family, and co-workers, which means you can share photos and personal information with friends and family
members, but not the guy who sits in the cubicle down the hall!
Like I said, if you want an invitation, let me know. I look forward to connecting!
Px
P.S. You’ll need a gmail account, which you can get at www.gmail.com. (It doesn’t cost anything.) Once you’ve established the gmail account, send me an email at Philip (at) 720CreditScore (dot) com and let me know that you want to be invited!
Keeping your secret
I used to be so ashamed.
You see, I’ve had a lot of secrets over the years:
I barely got into college because I was practically illiterate…
When I first started doing mortgages, I was broke…
I had lousy credit for a while…
And these are things I never wanted anyone to know. I felt like if people saw the real me, they would be horrified.
But that isn’t true, is it?
Everyone makes mistakes. Everyone has flaws. In fact, I have learned that there is always someone more successful than I am who has struggled with the exact some problem! I don’t care whether you are an entry-level employee or the CEO of a Fortune 500 company … your problems are probably more similar than you think!
And the truth of the matter is that hiding your mistakes only compounds them. Then you have to worry about people finding out.
It makes you feel a little sick inside.
Over the years, I’ve learned that transparency is a whole lot easier. I’ve also learned that people are happy to reach out and help when I let them know I need it.
I used to bottle things inside. If I had an important decision to make, I did it in a bubble, and often I wasn’t happy with the end result. If I was ashamed, I kept it from everyone, and then I lost sleep because I was terrified that my secrets would be uncovered.
Nowadays, if I have a worry, the first step I take is to disclose my problem to one other person. I try to pick someone who: 1) won’t be unnecessarily judgmental; and 2) will be solution-oriented.
Being transparent is second-nature to me now. I don’t share every intimate detail of my life with every single person I meet, but I also don’t avoid conversations.
By getting rid of secrets, I have found that I am more likely to work toward solutions because I don’t feel alone and isolated. Instead, I feel surrounded by people who want to help. And this applies to every kind of secret—financial, personal, professional.
Do you keep things bottled up? If so, now’s your chance to open up. You can start small until your confidence builds. The important thing is that you get exposure to supportive people who will inspire you to move forward.
If you worked through a problem by getting exposure to other people’s support, tell me about it here!
Philip Tirone
A three-for-one, by 720 Credit Score
The best thing a person can do to increase his or her credit score?
Reduce credit card debt.
Aside from your past payment history, which you can’t do anything about anyway, outstanding debt is the top factor in determining your credit score. The lower your balance (as a percentage of your limit), the higher your score.
Another thing that is great for your credit score is having an active or paid installment loan on your credit report.
So how can you accomplish both of these goals in one fell swoop?
Visit your local credit union and ask for a debt consolidation loan. Then use this loan to pay off your credit cards. If you are lucky, the interest rate on your debt consolidation loan will be lower than the interest rate you pay on your credit cards.
And there you have it: lower credit card balances, an installment loan on your credit report, and lower interest payments!
Of course, for this strategy to work, you must keep a low limit on your credit cards (though you should be sure to keep them active), and you must pay your debt consolidation loan on time.
At first, your score might drop a little bit. Adding a new loan to your credit report could hurt your score a bit.
But as soon as your credit cards report your new balance, your score will start to jump.
And once you’ve made about six months of timely payments on the debt consolidation loan, your score will climb even higher.
Have any questions on this strategy? Leave them in the comments section below!
Philip Tirone
Credit Bad after Identity Theft – Fastest Way to Fix
Credit Bad, How to Build Credit, Credit Score – Question #4
Question Submitted by: Kevin, Tempe, Arizona
I’ve heard you shouldn’t challenge every negative item on your credit report, but my credit is bad due to identity theft. If I disputed them individually it would take me years to clean it up, any thoughts?
Answer
Good point Kevin. Yes, if you dispute all your bad credit or items on your credit report at once, the bureaus can deem the request “frivolous” and ignore it. That is why in 7 Steps to a 720 Credit Score, I recommend you only dispute three items at a time.
Now, if your bad credit is because you were a victim of identity theft, its’ a different story. In that case, simple submit your police report with the dispute and the credit bureaus will not deem your request “frivolous.”
Make sure you follow my video lessons on how to build credit, as just because you get the bad credit off your credit report, it does not mean that your credit score will be above 720.
I’ve been wrong… ALL wrong!
I’ve been wrong about something …
I’ve always considered “The Big Why” to be really important.
The Big Why is basically your vision. What big goal or dream are you working toward that gets you pumped up and excited to start the day?
Proponents of The Big Why say that if you don’t know where you are going, any road will take you there. In other words, if you don’t have a Big Why leading you, you’ll end up somewhere …
But you might not like where you end up.
The Big Why is supposed to dictate how you live your life so you don’t waste your time doing things that don’t move you closer to your Big Why.
In the past, I told people that they absolutely must have a Big Why, no ifs, ands, or buts.
But I was wrong, and I take it back …
I still think the Big Why is a great tool, but I no longer think it is appropriate for everyone at every part of his or her life.
You see, I have a lot of exciting professional opportunities on the horizon. Some of them weren’t things I’ve ever considered, but now that they have presented themselves, I’m excited about them.
But I’m not entirely sure where I’ll end up.
In his famous commencement address to Stanford, Steve Jobs said: “You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever.”
And that’s where I’m at today. I can’t connect the dots regarding what will happen in the future. Instead, I make sure that each day feels purposeful, and that I’ve working with integrity and passion.
I’m trusting in God that someday, I’ll look back and connect the dots, happy with where I am and how I got there.
But today, I’m just thinking about what I’ll do today …
What do you think? Is it more inspiring to live day-to-day, or do you prefer to be led by The Big Why? Leave a comment below and let me know!
Like I said, I still think having a Big Why is a great tool for people who have a crystal-clear vision. If you have one, share it with my other readers so they can start thinking about their own Big Why.
Philip Tirone
Cash-Only Is Dead Wrong
Many so-called experts say that if you want to build credit, you should adopt a cash-only policy. But here’s the truth …
They are dead wrong.
Avoiding credit won’t make life easier. In fact, it will make life a heck of a lot harder.
If you adopt a cash-only policy, you won’t be able to build credit. In fact, you’ll end up with no credit. And no credit is just as bad as poor credit.
You see, the credit-scoring bureaus want to see that you can responsibly handle many different types of credit before they award you a good credit score. If you don’t accumulate a proven track record, you won’t get a good credit score.
This is why I always say that having no credit score is just as bad as having a poor credit score.
No credit score means …
- You’ll have a hard time getting great insurance premium rates.
- You might be unable to find a job.
- Landlords might not want to rent to you.
And if you ever need a loan (and you probably will!), you will get lousy terms and pay an arm-and-a-leg in interest.
Most likely, the banks are spreading vicious rumors!
Here’s the cold-hard truth …
The banks have intentionally kept consumers in the dark about credit scoring.
The banks fare better if your score is lousy. Simply put, the lower your credit score, the more you will pay in interest.
But what if you learned all the secrets and beat the banks at their own game?
Click here for an article I wrote about the biggest misconceptions of credit scoring. And feel free to pass the article on.
Oh, one last thing. Here’s a pop quiz …
Is the following statement true or false?
“If you shut down some of your credit card accounts, your score will go down.” Click here to read the full answer.
Credit Bad, Loan Modification, Behind on Payments, What to Do?
Credit Bad, No Credit Score, How to Build Credit – Question #2
Question Submitted by: Jan, Slidell, Louisiana
I refinanced our home into a poor loan with Countrywide. Our loan is now with Bank of America and we are two payments behind. Our credit is bad, any solutions?
Answer:
Jan – Thank you for your reaching out, and I know how difficult it can be when your credit is bad and you feel you have no options. It’s impossible to give you all your options with this information; however, here are a couple thoughts:
1) Your bank will not tell you this, but as long as you are paying any part of your payment, your bank will not negotiate with you on your loan modification. Myself and too many of my clients have gone through this – when you pay your bills, you don’t qualify for these programs. The irony of that statement amazes me every time I say it.
When dealing with the banks on the loan modification, be very nice (I guess most people with credit that’s bad are not that kind) and keep asking them for a solution. The banks are so overwhelmed that they cannot keep up with the requests they have and you won’t get their attention if you are paying.
2) There is no way around it; at the end of this process you will say, “My credit is bad.”
3) Your bank is going to tell you that you will be “unlendable” for 7 years because of credit bad. That is false. If you understand how to build credit, you can have a 720 credit score 5-6 years before those late payments fall off your credit report.
The key is to reestablishing your credit score is to start now. Also, don’t beat yourself up about this process, we have all had learning experiences over the past two years, and this too shall pass.
Credit Bad, No Credit Score, How to Build Credit – Question #2
First Time Entrepreneur with No Credit wants Business Credit – Possible?
Credit Bad, No Credit Score, How to Build Credit – Question #1
Question Submitted by: Benjamin, Aliso Viejo, CA
How can a first time entrepreneur, with virtually no credit score, who is starting his own business, apply for business credit – the correct way, and not have to use personal collateral to obtain the credit?
Answer by Philip Tirone:
In short, especially in today’s market, you will need to learn how to build credit personally, before anyone gives you business credit without personal collateral. In short, they will consider your credit bad, and not lend to you.
This was possible before the mortgage meltdown, but now, it’s not possible and anyone that tells you it is, is just dreaming.
I’m a big believer in entrepreneurs! The key is that you start establishing your credit immediately, and the good news, since you have no credit, you will have a 720+ credit score in a very short time as long as you take the right steps. At that point, the lenders won’t consider your credit bad.
I recommend you attend our free 60-minute teleseminar, it’s jam packed with information, and at the end of the call you will be invited to enroll into our full program (that is why it’s free). Even if you don’t enroll in our program, you will find this very valuable.
If you can’t attend, here is a link to our full program, however, since you are a start up – I will give you our $997 program for whatever you can afford. I’m really committed to riding America of bad credit or no credit. The only way I can do that is with people like you, if you help me spread the word.
If you want to enroll, email me at Philip (at) 720CreditScore (dot) com and I will get you enrolled immediately.
Rich or poor… it doesn’t matter!
It doesn’t discriminate between people who make a ton of money…
And people who make just a little money.
One way or another, it will bite you.
I’m talking about bad credit…
See, I just read two articles (which I reference at the end of this email) that explain the big difference between bad credit and good credit in today’s economy.
Here are some of the shocking statistics:
- On credit cards, a consumer with a great credit score (720+) will pay about 12.9% in interest; a person with a 659 credit score will pay about 20.3% in interest.
This means that on a $5,000 balance, borrowers with poor credit who pay $150 a month will pay an extra $1,186 in interest. That’s almost double the interest paid by those with great credit.
And it means the borrower with poor credit will be making those $150 payments for eight extra months!
- The difference between a 740 credit score and a 679 credit score on a $10,000 five-year car loan is about $2,760 over five years—or an extra $552 a year.
- And on a 30-year mortgage, borrowers who take advantage of today’s low interest rates still end up paying an extra $3,312 each year in interest if their scores are low (on a $300,000 loan).
So let’s do the math and see how this adds up…
Let’s imagine two people:
1) Person #1 has great credit, a 30-year mortgage on a $300,000 house, $5,000 in credit card debt, and a new car loan of $10,000.
2) Person #2 has all of the above, but poor credit.
Over five years, Person #2 will pay an extra $20,506 in interest!
It bears noting that these days, borrowers with less-than-stellar credit might not even qualify for loans. The Wall Street Journal article notes that 90 percent of all loans originated in 2011 were given to people with high credit scores!
In one of the articles, the author writes: “Lenders say the premium for poor credit is necessary to manage their exposure to risk.”
What do you think? Is this “credit divide” fair? Leave a comment below, and let me know what you think!
If you want to read the articles in their entirety, here are the links:
Fed Wrestles with How Best to Bridge U.S. Credit Divide
by Jon Hilsenrath
The High Cost of Low Credit Score
by AnneMarie Andriotis
– Philip Tirone
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