Can Student Loan Debt Impact My Job Prospects?

Almost all college students have to take out loans to help pay for their education. It can often take years, if not decades, to fully pay off loans because of the high interest rates. Late and missed payments can severely impact your credit, and bad credit can harm your job prospects post-graduation.

Many employers use a credit check to weed out candidates, so before you start your job hunt, you should consider the impression your student loan delinquency will leave. If you have significant student loan debt, consider reaching out to the debt attorneys at McCarthy Law. We can help reduce your debt through our settlement program.

What Is Defaulting on a Student Loan?

According to the U.S. Department of Education, nearly 10% of borrowers defaulted on their loan payments in Fiscal Year 2017. Students default on their loans when they fail to make payments for nine months. However, if you have a private student loan, your lender may deem you as defaulting after only one missed payment. Depending on the lender, you may even have to pay late fees in addition to higher interest rates and regular monthly payments.

Once officials declare that you defaulted on your loans, the entire unpaid balance becomes immediately due, regardless of any payment or forgiveness plans. Your credit score will also plummet, which can hinder your job prospects.

Can I Be Denied a Job Because of Bad Credit?

A company can legally deny you employment because of bad credit in 39 states and Washington D.C. There are only 11 states that ban this practice: California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, and Washington.

Remember that other more important factors go into obtaining a job, such as your skills and previous work experience. Your bad credit might not disqualify you.

Jobs that Conduct a Credit Check

Not all jobs require a credit report, but in some careers, you can be almost certain one will occur. Those include:

  • Jobs in government agencies
  • Banking jobs
  • Financial planners
  • Jobs where you handle budgets and finances

Do I Have Rights When Employers Pull a Credit Check?

If companies want to check your credit, they have to obtain your written permission under the Fair Credit Reporting Act. Before agreeing to a credit check, you should:

  • Speak with the hiring manager to learn more about the process.
  • Review your rights under the Fair Credit Reporting Act.
  • Request a copy of your credit report from the three major credit bureaus.
  • Look for discrepancies and report any errors.

Employers can see a lot of information on the report, but they won’t be able to see your credit score, date of birth, and account numbers. Instead, they can see your credit history, including your payments toward student loans.

Obtain Financial Help from the Attorneys at McCarthy Law

If you’re facing significant student loan debt, you might be hurting your job prospects, especially if you defaulted on payments. The student loan debt attorneys at the McCarthy Law Firm can help you.

Under our settlement program, one of our attorneys will begin the negotiation process to reduce the interest and amount the lender claims is owed. At the end of a successful settlement, the borrower typically only owes a fraction of the original balance, and the lender forgives the rest.

Take control of your financial situation by calling the McCarthy Law Firm at (855) 976-5777 or complete an online contact form today.

The following two tabs change content below.

Michael Adams

Michael Adams focuses his practice in debt litigation and consumer protection. Michael regularly assist clients through the debt settlement process as well as ensuring their rights as consumers are protected. Michael is an Arizona native who received his undergraduate degree from the University of Arizona and his law degree from Arizona Summit Law School where he excelled academically.