A bankruptcy can damage your credit history and cost you some of your assets, including your home or business. The presence of a bankruptcy on your credit report can also have other consequences, such as affecting your eligibility for employment in certain industries. Many employers may look over your credit report and use the information to help them make a decision on whether to hire you or not.
Where Credit Matters
Certain industries, including finance, banking, real estate, law enforcement and certain positions with the federal government, value credit reporting information when making determinations for employment. Hiring professionals in these industries may request copies of your credit report to determine if you have any history of handling finances irresponsibly, have a recent bankruptcy or if you are currently in a significant amount of debt. The presence of any of these factors may mean you are passed over for employment in favor of a candidate with a better credit history.
Old Bankruptcies and Employment
According to the Privacy Rights website, a bankruptcy older than 10 years may not be included on your credit report. It's important to contact all three major credit reporting bureaus to ensure an old bankruptcy is properly removed from your credit report before applying for a credit sensitive job. If a bankruptcy is not properly removed from your credit report after your written request, and it costs you a job, you may have legal recourse under the Fair Credit Reporting Act. These restrictions do not apply to a job with an annual salary of $75,000 or higher.
Your Permission Required
Any hiring professional or representative of an employer is required to obtain your written permission to request and view your credit history. You are not required to give a potential employer permission to view your credit report. This can, however send up a red flag for the employer and may factor in the employer's decision to not consider you for the position. If you have a bankruptcy on your credit report, it's best to let the hiring agent know about it as well as the circumstances surrounding why you filed for bankruptcy.
Importance is Overblown
According to MSN Money Central, some financial experts say the importance placed on credit history when it comes to employment is largely exaggerated. Even if you have a bankruptcy on your credit report, it may pale in comparison to a candidate who has a criminal background or doesn't have a verifiable identity. An employer may still refuse to hire you based on your damaged credit history, but it's also just as likely the bankruptcy is overlooked if you display the skills and credentials to excel at your new position.
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