Photo Credits: rachaelhubbard
With the collapse of our financial institutions and the wave of foreclosures and bankruptcies sweeping the nation, it’s no surprise that employers are turning to the credit report as a tool to measure an applicant’s character.
The Fair Credit Reporting Act allows employers to have access to your credit information. While they still need your written permission to run your credit report, not granting it may give them the impression that you have something to hide.
My friend Hajj Flemings is one of the few personal branding experts who regularly talks about the importance of a good credit history for personal branding (he calls the credit report a “character report”), going as far as dedicating one chapter of his book The Brand YU Life
The point is this: just as once-powerful brands like Bear Stearns and Merrill Lynch are now worthless due to financial mismanagement, our personal brand can be negatively affected by poor personal finance habits. Fortunately, there are a few things that we can all do to improve our financial position in any economic environment:
- Go to annualcreditreport.com and request a copy of your credit report from each of the three major consumer reporting companies (you are entitled to a free copy every year). If you see errors, dispute them in writing . The reporting companies are required to investigate and correct any mistake within 30 days.
- Live within your means. If you don’t have the money don’t buy it (except for big ticket items like a car or a house).
- Keep a budget and stick to it. Study your budget and make small cuts every month, starting with the items you don’t need or use.
- Put every bill on automatic payment, to make sure you pay them on time.
- Use credit cards to build credit, not to buy stuff you can’t afford. Pay your balance in full every month.
You can also read this simple personal finance guide I put together a few months ago. It is short and easy to read, and will give you some guidelines on how to set up your financial accounts and develop good money habits:
I also highly recommend Ramit Sethi’s blog, and his new book I Will Teach You To Be Rich
Thanks for alerting job seekers to the fact that their spending habits can have a negative impact on more than their wallets.
Hiring managers are digging into all kinds of information about candidates they’re vetting. They don’t stop at Googling their names to find digital dirt. It seems that it’s not difficult for them to completely lay bare everything about prospective employees.
And I love your personal finance guide. It’s extremely comprehensive and very helpful, although I’d be leery of investing in stocks right now.
@Meg Guiseppi
Yes Meg, you’re right about stocks. It pays to be careful. While I wouldn’t rule out investing in stocks completely, I would suggest a careful strategy, by just focusing on strong companies that are leaders in their fields, and that also pay dividends. The stock prices are so low now, that those dividends are giving yields of 7%, 8% or more. Not bad while we wait for the price appreciation.
Great post. Character is often overlooked, I think you nailed it with this blog post. Most people like focusing on the fun stuff, but steer away from the thing that require true character and responsibility.
@Hajj Flemings:
Thanks Hajj! And thank you for pointing out such an important subject in your book.