Does Your Credit Affect Employment?

Most people know that a low credit score can affect the ability to borrow. But it can also affect your employment prospects if you're in the market for a job. Most corporations and businesses use extensive background checks to select new hires; one of the useful tools is a credit report. A credit report can reveal much about character, level of responsibility and problems that may be a major distraction in your work.

Verification of ID and Previous Employers

Credit reports list not only your credit score. They may also list your previous employers. If you are being forthright on your application and list all of your past jobs, you have nothing to worry about and the report will confirm your truthfulness, which is a positive. If you are trying to hide a job for whatever reason, the prospective employer may see that as being deceptive, and they may not consider you further. Credit reports can also be used to verify your Social Security number to confirm your identity.

Judge of Character

Employers may want to look at how you manage your finances as a way to gauge your level of responsibility. If your proposed monthly salary won't cover your outstanding debts, they may question why you would accept it. Your personal debt may also place an extraordinary strain on your ability to concentrate or perform your job duties to the best of your abilities. An employer might consider employees who pay their bills late to have disregard for contractual obligations, which could possibly translate into a lack of regard for rules or obligations in the workplace.

Working With Money

If your job entails working with money, cash or valuables, your credit report may affect the hiring manager's decision. The rationale may be that employees who are late on their payments or overwhelmed with debt may be more likely to resort to desperate measures, such as committing fraud or stealing from the company, according to ABC News. The amount of debt you carry and the number of past-due account balances may shine light on your judgment, or reveal a high level of irresponsibility.

You Must Give Your Permission

Federal law requires that employees give their permission to employers before they conduct background checks or credit checks, so this screening is not a secret or something done behind your back. Read the fine print when you fill out your application. According to ABC News, only 20 percent of employees knew that employers could use their credit report as a screening tool. You are entitled by law to a copy of the background check.