No Forgiveness for Youthful Stupidity

three credit scores

My neighbor’s child graduated from college this week. When she came over to thank me for the gift I sent, I asked her how the job hunt was going.

“Not great,” she sighed.

“What happened?” I asked.

“Well, I had two interviews with this one company and I thought things were going well since they seemed so interested. But then I got a call saying that they weren’t going to hire me because my credit check came back bad.”

“What’s wrong?”

“I was stupid and missed some credit card payments during my sophomore and junior years and I’ve got some high balances now. I’ve also got a lot of student loans, so I guess that counts against me, too.”

I was sympathetic toward my young friend, but not surprised. More and more employers are using credit checks as a way of narrowing the field of applicants. This is especially true for any position that involves handing money. And, sadly, my friend was an accounting major. Yikes.

The thinking goes that if you can’t be responsible for your own bills, you might not be responsible with the employer’s money, either. Further, large debts are a red flag to an employer because they feel like someone with monetary problems might be more tempted to steal. You might be the most honest person on the planet, but the employer doesn’t know that. Other things being equal, they’d rather take their chances on someone with clean credit. Most people won’t steal, but they want to guard against those who might.

What this means for kids is that they have to learn to be responsible with money from the moment they get that first job, credit card, or apartment. In my day, employers didn’t check your credit, especially for entry level jobs.You had plenty of time to recover from your youthful stupidity. No one knew that you’d overspent, overindulged, and overdrawn yourself in college or when you were just starting out. By the time you moved far enough up the ladder to come under such scrutiny you’d (hopefully) matured and cleaned up your youthful monetary indiscretions.

That’s not the case today. The job market is competitive and employers can be choosy. Technology makes a credit check so simple that employers find it an easy way to screen and compare applicants. If you’ve got screw ups in your credit report, it’s going to come back on you immediately. Many employers won’t even give you a chance to explain in an interview that you made some mistakes but that you’re now taking steps to rectify the situation. They just see that credit report and toss your resume in the trash. You don’t have time to clean things up, so it’s best not to get in a mess to begin with.

Sadly, this is easier said than done. Financial education is lacking in the U.S. It’s up to the parents to take kids under their wings and explain the financial ropes. Unfortunately, too many parents aren’t knowledgeable either.

So what’s to be done? If you’re a parent, you have to realize how important it is that your kids get off on the right financial foot. You have to teach them about money and, if your own financial life is a disaster, you have to clean up your own act and model what you want your kids to achieve. If you’re a teenager or college student, you have to make the time to learn about money and how to be responsible with it. You can’t just leave all this stuff for “later” and expect it not to bite you in the butt.

There are plenty of free and low cost ways to learn about money. There are books and magazines at the library and websites out the wazoo that can teach you everything from how to grocery shop on the cheap to Buffet-level investing skills. There’s no excuse for being financially stupid, and employers know it. They figure that if you can’t get and keep your financial act together, they don’t want you working for them. Harsh? Yes. But that’s the real world.

(Photo courtesy of Casey Konstantín)

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4 Responses to No Forgiveness for Youthful Stupidity

  1. Trevor says:

    It’s true, it seems its a lot harder to trust someone if they can’t handle their money. Whether it be because you think they’re more likely to steal, or they don’t know what they’re doing. We tend to judge people more by character than by circumstance. That is, when we see someone has bad credit we immediately think they’re poor money handlers, and we don’t consider that they might be honest and hard working, but they’ve just gone through hard times. Anyway, I liked the article!

  2. Minny says:

    There are lots of TV shows about money management here. Very often there are students who have spent massively on clothes, make up, take away food – in fact on so many things and end up in huge debt.

    It is so sad as this shows that this kind of spending makes an impact on the future lives of young people.

  3. wanda says:

    Everything kids place on social media is also not going to be forgiving for today’s youth. This is already haunting many of them.

  4. Roman says:

    “To forgive is to set a prisoner free and discover that the prisoner was you.”

    Lewis B. Smedes

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