How Employers Use Your Credit Information for Background Checks
May 13th, 2009, Written By: Kerri Randall
You applied for a job that you were highly qualified for. You got an interview and you nailed it. As you anxiously await a salary offer, you instead get a call from the employer saying you’ve been rejected due to your credit history. Didn’t see it coming? Your credit score is one more feature an employer may use to determine if they want to hire you.
You probably already know that a high credit score and a clean history puts you in good standing for receiving loans, mortgages, etc., with a high limit and low interest rate, but it can also put you in good standing with a potential employer. If your score is high, it can indicate how responsible you are and show the strength of your character. It shows that you can be reliable and trustworthy.
If your score is low, it can raise some flags. Perhaps your score is low mainly because your debt is high. An employer might determine that you would not be able to pay down your debt with the salary they are willing to pay, which may mean that you could be searching for another job soon after starting with them. A high debt could also cause the employer to believe that you might be inclined to steal or accept bribes, especially if you are applying for a position where you would be handling cash or cutting checks and managing expenses. If your score indicates that you have been irresponsible with your own money, an employer will not want to risk letting you handle theirs.
Employers do use your credit information simply as a way to verify previous employment and your social security number. Be advised that they do legally need your permission to check your credit (but if you deny, know that that doesn’t look good). If they deny you the position due to your credit history, they must inform you of the fact and provide you with a copy of the report from the company they used. But unless you can point out a major error that would raise your score if removed, you’re still out that new job.
This is all yet another reason why you want to be aware of your credit score and keep it high. Make sure to get errors removed from your report right away and close any accounts that you no longer use that might be hurting your score. If you have negative history, such as being sent to collections or going through a divorce or foreclosure, take action to begin improving it. It will take time, but time is exactly what helps your score. The longer your positive history, the better your score, and the better your potential for being hired for your skills rather than denied for your credit history.
Categories: Credit Score Information
