Online financial news

Bankrate.com’s Steve Bucci recently answered a question from a reader about whether bad credit can hurt your job prospects.

The reader’s roommate defaulted on 2 payday loans while he was out of work (ouch!), and subsequently relocated to Washington, D.C. (debtor’s capital of the world!). He managed to get a job, but two months into it his background check came back and showed the defaults. His employer then let him go. I can’t imagine why they hired him before the background check was cleared, but that’s just me.

The reader wanted to know if this is legal and how he can clean up his mess.

The short answer is that the employer can absolutely terminate his employment for the past delinquencies – provided he was notified of that possibility. Since they did a background check on him, he was likely notified.

He made his mess, now he has to deal with the repercussions.

As for getting out of the mess, he has to get a less desirable job (that doesn’t do background checks!) and pay off the outstanding balances on his defaulted payday loans. It’s likely to be a long, tough road.

Let this be a reminder to all of us that:

• Despite recent government efforts to the contrary, we are responsibly for our actions.

• Payday loans are a bad, bad idea.

• Check your credit history (free when using AnnualCreditReport.com) before launching a new job search.

• Keep an emergency savings account in a high yield savings account to smooth that ride after a job loss.

• If you have some black marks on your credit history and you are applying for a job that requires a background check, be up front and honest about it – and proactive. Explain your situation and show what steps you’re taking to correct the issues before the background check.

Similar Posts:

• How To Enhance A Good Score To An Excellent Score
• 3 months payday loans can save you in emergency case
• How to Prepare for Difficult Financial Times
• How To Spend My Tax Return – Anna Answered
• New Free Credit Report Rules Take Effect