Improve Credit Score to Find Better Employment

Improve Credit Score to Find Better Employment

The average credit score in the US is 705. An excellent credit is any score above 739. If your goal is to secure employment in a profession that pays well, you should be aware that every employment application that you fill out normally authorizes employers to check your employment history, references, background and credit report. Positions with more responsibility and higher compensation automatically require a more extensive background check, credit check and criminal background check. If the final two or three candidates are otherwise equal, results from a background check, credit check or criminal records check often makes the hiring decisions easy for the employer.

Here are the best ways to improve your credit scores:

    • Always pay all your bills on time, or preferably early. This is the highest weighted factor in calculating your credit score.
    • Start an automated savings plan so that you pay yourself first every month and live on the remainder. This can be done by setting up automatic deductions from your paycheck to your 401K/IRA/403B etc. or using the automated bill pay service with your online banking to contribute to a savings or retirement account each month. People with the discipline to keep six months of living expenses in a savings account are normally able to maintain an excellent credit history and make better financial decisions.
    • Keep your credit utilization rate under 30% vs. your credit limits; if possible, a 10% credit utilization rate vs. your credit limits is ideal.
    • In many cases, especially if you have consumer debt with high interest rates, you can use the equity in your home for a debt-consolidation loan (pay off debt with a cash-out refinance/home-equity loan). In many cases, this will improve your credit scores dramatically, but you must have the discipline to keep those credit card balances at zero by paying off your consumer debt each month.
    • Do not close down the credit cards/credit lines that you paid off, even if you will not use them anymore. The more open credit you have and the lower your balances on same, the better your score will be. The older your open credit lines are the better it is for you (stability).
    • Maintain stability in your job, profession and address. Frequent changes in your profession, job or address often lead to financial difficulties/unemployment because without stability you are a less desirable candidate for credit or employment.
    • Work a part-time job evenings or weekends to pay down your debts faster. Pay down the debt with the highest interest rates first for maximum impact.
    • If you have had financial struggles and you have the debts to prove it, write and ask your creditors to agree to remove your late payment record in exchange for paying off your debt in full. Let them know that if they do not agree to this in writing, you will have to focus your repayment efforts on other creditors who are friendlier because you have such limited resources.
    • Analyze your credit records carefully from each of the three credit bureaus because there may be mistakes that are holding your score down. These mistakes could be as minor as old late payments that are still on your credit history even though they are over seven year old. Follow the directions to dispute credit reporting errors carefully. Each agency has their own policies and procedures. I recommend you use certified mail with a return receipt on all correspondence, so you have official proof of delivery. If one of your creditors fails to respond within a reasonable time, you will automatically win your dispute.

 

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