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Shaky credit history won't cost you the job

The Question:

I have a question pertaining to getting a job at a bank despite a shaky/credit record. I have just applied for a job with one of the a Big Five Canadian banks. It's a back-end, process-optimization type of role so I wouldn't be dealing with any of the bank's clients. I am passionate about the role but I am just wondering if a spotty credit record will have any bearing on my employment chances.

Over a period of about a year, I went through some personal issues and drove up a credit card debt of about $18,000 starting four years ago. Shortly afterwards, I returned to school and used part of my student loan to bring that down to about $7,000 now (and currently one late fee behind payment) over the last year or so. I have been under-employed since I finished school so my minimum payments have been a little haphazard as I look for more permanent work. Otherwise my credit footprint was generally small before this happened (I have no loans, never declared bankruptcy and no criminal record) and I don't do any other banking.

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Would this information be available to HR and the department that I am applying for? Will this impact my chances for the job and if so, how can I explain myself if it comes up?

The Answer:

You are certainly not alone in dealing with credit card debt. Unforeseen or difficult circumstances can often lead to financial strain.

When hiring, most employers look for qualified, passionate and responsible candidates who will fit well into a company's culture. However, depending on the nature of the position, they may require further details on your financial background.

Generally speaking, when a background check is required, I advise job seekers to be open and honest up front. If you have anything that is less than flattering in your background – whether you've been fired from a job, declared bankruptcy etc., your best bet is to candidly explain the context of your circumstances to your prospective employer, because the one thing employers won't tolerate is dishonesty.

According to Dave Dinesen, president and CEO of BackCheck, a pre-employment screening services company, less than 20 per cent of employers include credit checks as part of an employment screening process. BackCheck has screened over three million Canadians for more than 5,000 organizations, and Mr. Dinesen says the vast majority of employers use credit checks for identification verification purposes (such as employment history and address history).

"Unless a job candidate has a history of credit fraud, or extreme financial irresponsibility, employers don't generally make a negative hiring decision based on shaky credit," said Mr. Dinesen. "The only exception would be if the position calls for financial fiduciary duties, but other than that, if a candidate is qualified, a few late credit card payments shouldn't preclude him or her from working at a bank."

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TD Bank Group does ask candidates for permission to do a credit check once an employment offer is accepted. "When we interview, we look for candidates who fit with TD's culture – an open, inclusive and collaborative work environment where every employee can make an impact," said Chandra Williams, senior manager of talent management at TD Bank Group. "But the credit check is an important condition of our employment offer as part of our responsibility to our stakeholders."

"We recommend that employees who accept an offer of employment be open and honest about anything that may appear in their credit check," advised Ms. Williams. "In our experience, there are many factors at play that require each case to be considered on its particular circumstances."

Ms. Williams also noted that if any concerns arise, TD reviews the situation in depth, and sometimes initiates a follow-up discussion with the candidate before making a decision.

The good news is that your shaky credit history won't necessarily derail your employment pursuits. Just take an open and honest approach to put your best foot forward.

Julie Labrie is the vice-president of BlueSky Personnel Solutions in Toronto.

Have a question about careers, labour law or management? Send it to our panel of experts: Your name and address will be kept confidential.

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