What Do Chase, CitiGroup and Bank of America Relate to Your Your Employment Search?
Once upon a period of time, credit card issuers typically only trimmed credit lines on customers whose behavior suggested they might develop into a credit risk. For example, late payments, exceeding an existing credit line, low credit score - those types of things might have triggered the bank to reduce the amount of money they were willing to lend.
It seems pretty much everyone is in the crosshairs of the banks.
They're now looking at people who have excellent credit and spotless repayment histories. Customers who never possess a balance (i.e. they pay entirely each month), pay on time, and still have 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 weeks.
There are consequences to that action. If you're one of the those who got this sort of letter, you understand this first-hand. Because when the bank pulls back your line of credit, your FICO score takes a hit.
Roughly 1 / 3 of your credit score is based on the percentage of credit limit you've used. So a lower credit limit can lead to 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 work search?
When your prospective employer conducts a routine background check as an element of its homework, your credit report is an element of that screening. (Lest you think this is a minor issue, reconsider that thought. More than 40% of American employers routinely check the credit reports of job candidates.) And if the Bank of America Careers Login trimmed your line of credit, your score was almost definitely negatively impacted.
With the employment situation as competitive as it is at this time, you don't need anything dragging you down...just like a lowered FICO score...especially when there is absolutely nothing different relating to your repayment behavior.
There's a 2nd issue: small businesses proprietors. Lines of credit is often lifelines enabling them to handle cash-flow issues. Like making payroll. Reduced line of credit may mean a forced cut in head count.
So if you've played through the rules, developed your credit score, and consistently paid your bills - too bad. If they decrease your line of credit, the bank that issued you that card could have a negative affect on your job search.