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Unfortunately I started a business but it didn't do so well. Due to this I've been left with debt and unfortunately it's affected my credit rating.

When applying for roles in large firms, I'm receiving knock backs because of the above. I obviously know that firms are looking for people with a clean credit history as it shows that they are responsible.

But, what about the people who take risks and have that entrepreneurial spirit. (like myself) :p

How can I get my message across to employers that this is also a good trait?

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    i don't understand why this was closed. I put a question up on meta regarding this. here – acolyte Jul 11 '13 at 17:55
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    @JoeStrazzere investment banks will certainly credit check you. – bharal Jul 11 '13 at 18:11
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    If the large company is in financial services, you're out of luck. I'm seeking the 'United Kingdom' tag, one of the biggest businesses in the UK is finance. What happens when you focus on smaller companies? – Meredith Poor Jul 11 '13 at 23:17
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    In both my experience and reading over the last 7 or 8 years, it's becoming increasingly common for companies (at least in the U.S.) to check credit ratings in pre-employment screenings. – GreenMatt Jul 12 '13 at 13:59
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    Rejecting people for jobs over credit seems like terrible idea on the larger social scale. How will people ever rebuild their finances if they can't work?! Of course, individual employers often don't care about society as a whole. – Andrew Whatever Aug 21 '15 at 20:24
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This is definitely a job-by-job issue. While you're right that some jobs are looking to a credit check as an indication of your personal/professional character, others are looking at it as an indication of whether you might be susceptible to blackmail, or have a personal issue that could be exploited by an adversary.

Thoughts for addressing it:

1 - Make it a non-issue - if you're regaining solvency, get credit counseling from a reputable source - there are ways to regain a good credit rating, and getting someone to review your case and help you fix any nagging issues holding you back is a good plan.

2 - Don't lie - quite often, jobs with a credit check will begin the screening process with a question of something like "a credit check is part of our background check process, will this be a problem?" Don't lie. If you have a known bad credit rating, take the opportunity to explain why, what you're doing (and have done) to correct it, and when you expect it to improve. If the credit check is security related, you'll compound the trustworthiness problem if you lie.

3 - Paint a picture in your personal history - when you are asked to summarize yourself, emphasize the internal drive that lead you take the risk, the passion that led you to get into debt doing so, and what you learned from the experience (which hopefully includes not getting into a bad credit situation in the future!)

4 - Avoid it in the future - there are ways to take on entrepreneurship without maxing out your personal resources. Assuming you have the urge to do another such adventure, research ways of getting funding, building a business case, and separating your personal finances from your business.

Some jobs will simply say no. A big organization with very established rules and policy will simply reject you. Truth is - they aren't hiring for entreprenuerial spirit - a big organization will prioritize following rules and dedication to stability over the willingness to learn alot on a wild adventure. To spare yourself the time and frustration of wasted effort, be aware of credit check processes, and steer clear of huge organizations with very formal structures where the credit check is a non-negotiable requirement.

5

The first thing you can do is start working on cleaning up your credit as best you can. Make arrangements to pay any open collections, keep up with any structured debt payments that you can, and if it really is just too much, file bankruptcy. Yes, that's the blackest black mark, but it consolidates your debt under terms you can live with, and helps you get your feet back under you so you don't stay down after getting knocked down. The biggest problem with bad credit during a job search is when your report indicates you're not only deep in debt but still sinking.

The second thing you can do after a financial meltdown is to look for a job with responsibilities such that bad credit wouldn't look like a bad fit. If you're not in a position where you have the ability to abuse that position for your own financial gain, a credit check typically isn't a bar to employment. Jobs that do require good credit include:

  • Jobs requiring a federal security clearance. The federal "secret" clearance check, in fact, is a criminal background check and credit history examination, and that's all. Why? Because the number one historical reason to divulge state secrets is money, even when the accused or confessed leaker gives other reasons at the time. Very, very few people have given away state secrets for free, and it's a relatively new phenomenon (Snowden, Assange's WikiLeaks sources, etc)
  • Jobs involving trade secrets. The Coca-Cola Company doesn't require a federal security clearance to become a factory "mixmaster" who controls the machines that blend the various soda syrups, but they do require that you sign all sorts of sworn, notarized documents that will effectively end your life if you divulge the recipe, no matter how rich you may get by doing so. They also require a certain amount of demonstrated responsibility and trustworthiness earned over time; they don't just go to Monster.com and look up resumes for mixmasters when they need one, there's always a hierarchy they can promote from. This is the ostensible reason most other companies give for requiring a credit check; every company has information that should not leave the walls of the corporate headquarters.
  • Jobs involving handling money. For obvious reasons; if you have authority to dispense cash, cut a check or otherwise work with real money (not just bean-counting) then they don't want you skimming any off the top to pay off your debts.
  • Jobs involving hands-on tracking of things of value. Again, obvious; if you manage a warehouse's inventory and are in financial trouble, it's way too easy to arrange for a pallet of something expensive and fenceable like consumer electronics to fall off the back of a truck.

The third thing is to have a good explanation for the financial trouble. Good explanations include:

  • One divorce. Everyone makes mistakes and you're not unemployable just because you married the wrong person (if you were then so would be 30% of the adult U.S. population).
  • Identity theft. Happens to the best of us.
  • Layoff in a bad economy. Ditto.
  • Business failed in a bad economy. Thousands of small business owners closed up shop in the last 5 years; being one of them is neither special nor worrisome to me as long as I'm not hiring you to turn my own company around.

Bad ones include:

  • Multiple divorces in the span of your credit history. If nobody can tolerate being your spouse long enough for your credit history to be clear of it, that looks bad on you personally and professionally. It indicates you dive into serious commitments without thinking and don't learn from mistakes, and/or that you have social or personality issues making it impossible for you to stand the company of any other person too long (or they you).
  • Drinking/drug problem. Natch; addictions are never really "cured", so your employer will be dealing with a ticking time bomb.
  • Gambling problem. Ditto.
  • Can't follow a budget. Well if you can't control your spending, what else about your life is out of control and could impact the company?
3

Companies that are looking for people with clean credit histories are looking for people they can trust to make good decisions with the companies money. You need to be able to talk about how the experiences have changed you, what you learned and how you have grown, and probably most importantly how you would avoid getting in that situation in the future.

If that is not the case with you because you would take the risks again and feel that while there were mistakes, it was not taking the risks, then you are probably not the type of person that company is looking for. That is not a bad thing, as the worst is sitting in a job where you are forced to suppress your instincts and judgements in order to make someone else happy. There are companies and positions out there that will embrace your willingness to take risks and fail.

The most important thing for you to show most companies is that you are trying to make the right decisions and take intelligent risks. You need to be able to look back and talk about the mistakes that you made in a way that accepts the responsibility for the failure and shows that you have grown. The problem is not that you failed, just that you have not come back from it yet. Once you do I suspect you will find doors opening all over.

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