What Do Chase, CitiGroup and Bank of America Have to Do With Your Your Work Search?
Once upon a time, credit card issuers typically only trimmed credit lines on customers whose behavior suggested they might turn into a credit risk. For example, late payments, exceeding an existing credit line, a bad credit score - those types of things might have triggered the bank to decrease the amount of money these people were willing to lend.
Seems like pretty much everyone is in the crosshairs of the banks.
They're now looking at folks who suffer from excellent credit and spotless repayment histories. Customers who never possess a balance (i.e. they pay in full each month), pay on time, and possess FICO scores as high as 830 are receiving letters indicating their lines of credit have been reduced. I know three people fitting that description who have received such notification in the past couple of weeks.
There are consequences to that action. If you're one of the people that got such a letter, you understand this first-hand. Because when the bank pulls back your credit line, your FICO score takes a hit.
Roughly a third of your credit rating is based on the percentage of credit limit you've used. So a lower credit limit can result in a higher utilization ratio and negatively impact your score...with virtually no change in your purchase or payment behavior.
What does this have to do with your employment search?
If your prospective employer conducts a routine background check included in its due diligence, your credit report is an element of that screening. (Lest you think this is a minor issue, think again. More than 40% of American employers routinely check the credit reports of job candidates.) And if the Bank of America Careers Login trimmed your credit line, your score was more than likely negatively impacted.
With the job market as competitive as it is right this moment, you don't need anything dragging you down...similar to a lowered FICO score...especially when there is practically nothing different concerning your repayment behavior.
There's another issue: small businesses. Lines of credit may be lifelines enabling them to take care of cash-flow issues. Like making payroll. Reduced line of credit may mean a forced lowering of head count.
So if you've played via the rules, built up your credit score, and consistently paid your bills - too bad. If they decrease your line of credit, your budget that issued you that card can have a negative impact on your job search.