IE 11 is not supported. For an optimal experience visit our site on another browser.

I have bad credit. Will it hurt my job hunt?

Some employers, especially in the financial world, will check your credit rating. Jean Chatzky offers advice to smooth any shocks.

Q: I am a 27-year-old who is pursuing her MBA and working full-time.  I have a FICO of around 600 and just went thru CCCS (Consumer Credit Counseling Service) and consolidated around $35,000 worth of credit card debt.  How will this affect my ability of obtain a new job?

A: First, let’s explain your FICO number. FICO is a score provided by the Fair Isaac Company that combines credit ratings from several agencies. The higher your score, the better your credit rating. A score of 600 puts you in the bottom 25 percent, but is by no means the lowest.

Now, to your question. It all depends upon whether or not the employers you’re looking at pull credit reports. 

In general, reports tend to be pulled in positions where you’re working directly with money.  That may be the case for you because it sounds like you are in a financial field. 

The good news is that potential employers who want to pull your report have to let you know they’re doing it.  That gives you a good opportunity to explain that your credit isn’t as clean as you’d like it to be, but that you’ve taken responsibility for your actions and are on the road to financial recovery. 

You can also, if you’d like, write a statement and send it to the agencies to be attached to your report.  That way anyone who pulls your report can read about the positive actions you’ve taken.

Q: I've got a credit card that has a sizeable balance and seems to be out of control.

I've heard that you can negotiate a way to pay off your card. For example, asking the card company to pay 90 cents per dollar of your balance in exchange for you paying the remaining 10 percent in full right away.

Is this true? And if so, do you having any suggestions on how to do this or whether it is even a good idea?— Jean, Columbus, Ohio

A: When credit card companies start suspecting that you are a bad credit risk — i.e. that you may end up paying them nothing — sometimes they’ll negotiate with you for pennies on the dollar.  For you, though, this should be a last resort, just steps away from filing bankruptcy. 

Why?  Because although it sounds like an easy out, it’s not an easy out.  It will demolish your credit rating and your credit score and that will hurt you in the future when it comes to borrowing more money (of course), getting a decent rate on homeowner’s or auto insurance, renting an apartment, even getting a job (see Q&A above). 

Your credit score is a measure of how financially responsible you are, and going this route labels you as pretty irresponsible.  So, before you go down this road, make sure you’ve tried everything possible to get a grip on this debt, including credit counseling. 

I know that credit counselors have a bad rap these days, but there are good ones out there.  For instance, go online and take a look at the Web site for Take Charge America, a counseling service out in Arizona. 

Give them a call and spend an hour answering questions about your finances.  The counselor on the other end will be able to tell you if this sort of negotiation is the right thing for you, if your debts could be handled with a debt management program (a blemish on your credit report, but not nearly to the magnitude of what you’re suggesting) or if you need to file bankruptcy. 

If, after doing this, you still are set on trying to negotiate, you can certainly give it a whirl.  Call customer service.  Explain that you don’t have the money to pay your entire bill but that you’d like to figure out a way to pay something.  Then asked to be transferred to someone who has the power to deal with that.

Jean Chatzky is the financial editor for “Today,” editor-at-large at Money magazine and the author of “Talking Money: Everything You Need to Know About Your Finances and Your Future.” Her latest book, "Pay It Down: From Debt to Wealth on $10 a Day," is now in bookstores. Copyright ©2005. For more information, go to her Web site, .