Finding a job can be a stressful and difficult task – and if you have poor credit, you may have an even harder time finding a job. A 2016 CareerBuilder study found that almost one-third of employers run credit checks on their potential hires, on the assumption that people with good credit are more likely to be productive employees.

That assumption may or may not be true – but, in most states, an employer is able to use your credit as part of the hiring evaluation process. The District of Columbia and eleven states currently limit the gathering or use of credit history in making employment decisions: California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, and Washington. Aside from these states and a few cities in other states, including New York City, NY, and Philadelphia, PA, your credit history is fair game.

When credit is considered in the hiring process, the unemployed with low credit scores can fall into a "poverty trap." It's harder to find a job with poor credit, and therefore harder to get steady income. Lack of income makes it harder to pay bills and reduce existing debts. Credit scores are more likely to sink, further diminishing job prospects. The cycle repeats.

A recently-released working paper from the National Bureau of Economic Research (NBER) quantified the poverty trap. The authors characterize the effect as "a large and persistent wage loss," roughly equal to 2.3 percent per month over a ten-year timeframe. These results are in line with previous research from DEMOS showing that 10 percent of potential hires from households with low-to-medium income were denied jobs because of poor credit.

Evidence suggests that bans on credit checks for employment may partially level the playing field, but produces unintended consequences. The NBER paper estimates that a credit check ban helps 43 percent of the population, but "reduces matching efficiency" by increasing the applicant pool. For the most productive workers, the average unemployment period increases by 13 percent when a credit history ban is included.

A separate report from the Opportunity & Inclusive Growth Institute of the Minneapolis Federal Reserve finds that where credit check bans are in place, job creation declines and workers with subprime credit actually see a 5.8 percent increase in delinquencies.

In essence, credit check bans do help those with poor credit find jobs – but it's debatable whether the net effects are positive.

If you're unemployed and have poor credit, you really don't care about the collective effects to America. You just need a job so you can pay your bills. How do you prevent falling into the poverty trap, or escape it if you're already in it?

Start by checking your credit report – not just your credit score. Look for any errors or signs of fraudulent use of your credit. You may deserve a better credit score than you have.

If your credit report is accurate, the best thing you can do is make all payments on time – even if all you can afford is the minimum payment. The second most important factor in a credit score is how much credit you use relative to your limits. During unemployment, you'll have to rely more on credit to get by – but it's important to cut expenses to the bare minimum. Make a budget and review it regularly for potential savings.

Your credit may not play a role in the job you eventually get, but why take a chance? An improved credit score can make life easier in several ways, regardless of your employment status.

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