Importance of a Credit Report for Employment

Given the increasingly competitive and tight job market, employers generally have little trouble filling open positions and can afford to choose carefully. A credit report reveals far more than simply whether an applicant pays the monthly bills on time, it represents a reliable indicator of responsibility and discipline. Some personal circumstances that negatively affect a credit report can be beyond an individual's control, such as health problems, that should be explained up front.

References

Before the widespread use of credit reports as a reference in themselves, employers engaged in the typical procedure of calling previous employers, confirming college and other training records, and scheduling multiple interviews. Despite ongoing debates about the fairness of this practice, the Society for Human Resource Management believes "there is a compelling public interest in enabling our nation's employers -- whether that employer is in the government or the private sector -- to assess the skills, abilities and work habits of potential hires."

Ideal Job Match

Employers naturally seek applicants who are qualified for the position at hand and also if they will fit well within the company's culture. If a potential employee is incapable of handling his own affairs, that is typically a red flag that must be reasonably explained in the job interview. Further, employees with the stress of severe financial burdens may not be ideal to trust with sensitive internal matters.

Preparation

Job applicants will serve themselves well by doing everything possible in advance of the actual interview. By securing a copy of their credit reports, addressing any items that may be incorrectly reported and being fully prepared to answer the inevitable questions from potential employers, individuals will position themselves for serious consideration. Many explanations are entirely reasonable, such as a medical leave or being laid off from a position for economic reasons despite an exemplary history. There is no reason to be intimidated by such factors, and employers appreciate forthright explanations.

Improvement

Potential employees should begin taking steps to improve their credit scores as soon as possible. Even with a checkered credit history, a solid six months of on-time payments will measurably improve a credit profile. While only time can fully rectify a negative report, employers are typically less concerned with what may have happened years ago, and give more weight to current records.