Some things, such as car loans and mortgages, to name a few, are hard to get when you have no credit history. Even certain credit cards might be hard to get (although there are lots of credit cards for people with no credit). But there’s one thing you shouldn’t worry about getting without having any credit history: a job.
Here are some big questions you might be obsessing over, and some information that should put your mind at ease.
‘What if they’re looking at my credit history and I don’t know about it?’
Oh, you’ll know.
Because of your rights under the Fair Credit Reporting Act (FCRA), you’ll have to sign a form giving the employer permission to access your credit information first. On top of that, your employer won’t actually see your credit score — just a modified version of your credit report.
If you get rejected based on your credit information, the employer is also required to provide you with a copy of your credit report and an explanation. Besides the FCRA guidelines, 11 states have additional restrictions about how credit reports can be used. If you think that an employer has violated one of these laws, you can seek damages in state or federal court.
‘What if they think no credit history looks bad?’
Try explaining your situation. If you’re fresh out of college or just recently moved to the U.S., chances are your employer will understand why you have no credit history and no credit cards. If they still show concern, offer a list of references that can vouch for your trustworthiness, financial stability and aptitude for handling money.
‘Will they reject me because I don’t have a credit history?’
Probably not. Credit-check-based rejections are typically the result of bad credit — not a lack of credit. The Nerds did some digging and couldn’t find an example of someone losing out on a job because they had no credit history.
Research also shows that when employers look at applicants’ credit histories, they’re usually looking for red flags, like collections or current outstanding judgments; they don’t sweat the small stuff. Eight in 10 human resource professionals who ran credit checks on applicants said that their organizations had hired people whose credit reports included negative information, according to a 2012 study by the Society for Human Resource Management. Considering that, having no credit history likely won’t be a deal breaker for most employers.
The next step
Now that you’ve stopped fretting, consider tackling the root of the issue: your lack of credit history. Apply for a no credit credit card and build your credit history from scratch. With on-time payments and responsible borrowing, you can rest easy in future interviews knowing that your credit report shows your best side.
Image via iStock.