Having a good credit score can provide you with a lot of benefits—we hear that all the time. Did you know, though, that it may also help you with your nursing career?
We didn’t either. So we went to April Brissette, Chief Credit Officer of Bankers Healthcare Group. She took time to explain how good credit can influence your career and how to make sure that you have it (or fix it if you don’t).
Please explain why having a good credit score can boost your nursing career. Can it help you get a better job? Do employers now look at credit scores before hiring or promoting?
A lot of employers do background checks, particularly those hiring for professional level positions, and your credit score can be part of the background check. No one can pull your credit without your permission, but that is often in the fine print of the background check you sign off on. Of course, you can decline a background check if you’re concerned about your credit score, but that might be a red flag to the employer.
Your credit score can be viewed as a reflection of your character. Someone with good credit illustrates being trustworthy and responsible; someone with poor credit can paint a very different picture. If an employer sees that you have public records (for example, bankruptcy or tax lien) or you’re past due on accounts, it can tell a story about your financial history.
For temporary positions, like a traveling nurse, background research has a tendency to go up. Why? Because when you’ve had numerous employers for a short period of time, they may not be viewed as strong references.
As a representation of your financial health, your credit score can open or close a lot of doors—not just for financing approvals, but for even getting a job.
How can a nurse find out what his/her credit score is?
Sign up for CreditKarma.com—it’s a free app/website where you can access your credit score as many times as you want, and you pay absolutely nothing. (Advertisers use the site to market to people, which is why it’s free.)
It’s incredibly important to know your score; it’s a laborious process to get things removed, so you’re better off being informed about what your report says. Check it regularly. When you’re doing a self-inquiry—checking your score yourself, also known as a soft pull—it does not impact your score, and nobody will know your credit is being looked at.
CreditKarma alerts you about anything that affects your score and gives you recommendations on how to improve it, as well as approval odds for different financing options, tailored specifically to you.
Suppose nurses don’t have good credit scores? What can they go about doing to raise them?
The best way is to keep your accounts current: Pay everything on time.
Reduce or eliminate the amount of inquiries you have. Only have your credit hard pulled if it’s absolutely necessary. For example, when buying a car, you don’t want to have three dealers pull your credit—because dealers then send it to their banks and before you know it, a ton of people have accessed it and then your score drops.
Keep your revolving availability at least 50%, ideally 75%. Let’s say your available limit on your credit cards is $10,000 total; you want to ideally keep your balance at $2,500 or less, but never past $5,000. The lower your availability, the more your score goes down, and that can be an indication that you’re struggling, from a lender’s perspective.
It takes time to improve your score. The most derogatory credit items can remain on your report for 7 to 10 years. They will have the largest impact on your score when they first appear. Over time, the impact it has on your report decreases. If you’re coming back from a terrible life event, you just have to take time to work toward improving it—but it’s important to use that time to get your score back up by doing everything right.
Ask to be added as an authorized user/signer—perhaps a parent or spouse can add you to use their credit card or to just have you added to the account. It doesn’t make you the authorized payer, but it goes onto your credit report and history. Just be warned that if the actual signer is late, it will also affect your score.
What are some tips to create a good credit score?
The number-one common mistake that young professionals make is opening a ton of credit card and store card accounts. This increases the number of inquiries and hits your credit score. They think it’s helping build their credit because creditors want to give them a card, but it won’t help get your score up. Ideally, you should limit your inquiries to 1 to 2 times a year. Every six months, try to establish credit with an institution—a credit card, auto loan, etc. And remember, make all of your payments on time and don’t go over 50% of your limit.
Pay off your balances in full on your credit card every month if you can. There’s a misnomer that if you don’t carry a balance, it won’t help your score—but it’s actually the opposite. Pay off in full if you can.
Don’t over-borrow. There are a lot of lenders that will give you more than you should borrow. Be smart, and don’t borrow something if you can afford to make the full monthly payment comfortably.
What are some things that nurses absolutely should do or shouldn’t do with their finances to keep a good credit score?
Do not pay anything late, no matter what it is.
If you can make even the minimum payment, do it, because if something is late, it’ll show up on your credit report. Credit cards should be used as a tool rather than a crutch. Use them to get your rewards or in an emergency situation.
Put everything on autopayments. This is a great way to make sure your payments are never late. It’s a great safety net; it won’t get your balance down unless you schedule to pay it off in full, but it can reduce the stress in that you never have to worry about incurring a late fee. A lot of lenders will offer you a discounted rate if you set up auto-payments—just ask.
Do not co-sign for someone else. In our experience, what we see is a lot of borrowers will co-sign for their children for auto-loan/school loan, and their child doesn’t make the payment—then their credit score can suffer. There is a misunderstanding that as a co-signer, not the main borrower, you’re less of a risk or free from it, but it’s not true.
Should they see a financial advisor for help? If so, what should they look for in one?
I don’t think it ever hurts. Seeing a financial advisor might not do anything for your credit, but they can help you take control of your finances.
Do your research—choose someone who is a certified financial planner. The credentials prove they’re educated and certified.
Is there anything that you think is important for readers to know?
You wouldn’t want to miss out on the perfect career opportunity because you haven’t protected your financial health.