If you choose not to pay student loans and credit card bills, your degree is almost worthless in the job market.
In today’s modern economy, many companies will not hire you if you have bad credit.
Many companies are running credit reports on potential employees to thoroughly judge their character. This rational suggests that if you have bad credit, you are unreliable and could be a liability to the organization.
“I look at everyone’s credit before I hire them” said Bill Stimpson, senior manager in charge of hiring at NSA Industries. “I don’t discriminate, but if there are two equally-qualified applicants, I will offer the position to the one with better credit.”
This trend is common across the country. Employers are not the only organizations looking at credit. Landlords and rental agencies often review credit reports on new applicants. According to Stimpson, people with better credit tend to be more reliable.
“Credit is the most important aspect of a person’s life,” said Karen Sylvester, loan officer at North Country Federal Credit Union.
According to Sylvester, interest rates for customers with good credit can be as low as 3.99 percent. With poor credit the same loan could have an interest rate as high as 16 percent.
“It is important to break this down to everyday tangible numbers,” said Sylvester, who mapped out two loan scenarios.
If a person with good credit borrowed $15,000 over five years to buy a new car, the interest rate would be 4.99 percent. The total interest over the loan would be $1980 and the monthly payment would be $283. If a person with bad credit took out the same loan, the total interest would be $6881 and the payment would be about $365, nearly $100 more per month because they did not pay their bills on time.
“I want to break this down even more,” said Sylvester. “Let’s base this on $10 per hour”.
A person with bad credit would pay $4901 more for the loan in just interest. If that person worked full time for $10.00 per hour, they would have to work 490 more hours than the person with good credit to pay for the same loan.
“That is equal to over 12 weeks of work if they put every dollar towards the loan,” said Sylvester. “That is why credit is so important.”
North Country FCU is committed to working with college students to ensure they build strong credit files. For more information call Karen Sylvester at 802-264-6744 to schedule an appointment.