Tuesday, April 20, 2010

The Consequences of Job Hopping

I do not how many people do this, but overall job hopping damages your credit score. Your FICO scorecard is ruined if you hop from job to job. Why do I say this? I know from other people who have been denied jobs and credit cards. The credit card companies along with the mobs and FICO consider you a risk when you go from job to job. So consultants out there have to sometimes dispute their score because of the per diem jobs they might obtain.

I realized this because of the fact that the scores of people who are denied credit have commonalities that Transfax, Experion and the other one looks at. They consider good credit risk to someone who has kept the same job for years, who lived in the same place for years, who pays their bills on time and who has never filed bankruptsy. Do only time I see job hopping as permissible is if you transition into one job to another smoothly, as in giving the proper two weeks notice and finding a higher paying, more stable job.

There are some high risk candidates besides consultants and job hoppers and those people are the self-employed. While I partially fall into this catagory, my primary source of income is from Sam's Club while secondary sources comes from investments. When employers check your employment  history, some  might also check your FICO score, hence the name background check. And while employers cannot disciminate against you for gender, ethnicity, or income bracket, they can disriminate against you for job hopping and having a low FICO score. Also mortgage companies hate to deal with you if you have not held a job for more than one year. They consider you to be irresponsible and unrulely. Such might not be the case, but job hopping is a high risk manuver. Even more so than stocks. You establish yourself with one company and then hop to another because they pay "better" and burn than bridge then have to re-enter probation for 90 days yet again. So remember that when you go from one $7.75/hr job to another $7.75/hr. job. The results can decimate your credit score.

Perhaps if you choose to do so, one should check with trying to obtain a grace period where the job hours do not overlap. That is what I did when I went from City of Reno to Sam's Club. The transition was fun and rewarding, but draining at the same time. While you make a lot of money, you lose a lot of time in exchange. But the city did not hold any animosity towards my departure. So I would actually reccomend this course of action if it is option to you.