Does a Credit Check by an Employer Affect the FICO?

An interview is just one step in getting the job. Many employers ask for permission to do a credit check before they hire you. Jobs in finance or that deal directly with money are more likely to require credit checks before you are hired. Some companies may also run a criminal background check before making the decision. You must give permission for these checks to happen, but if you refuse, your employer can choose not to hire you.

Employer Credit Check

An employer will pull your credit to ensure you are not a risk or liability to the company. The employer may be looking to see if you are current on your payments, and that you demonstrate wise financial decisions both currently and in the past. An employer must have your permission to run a credit check on you. Some companies, typically financial services, will perform review employee credit on a regular basis.

Does an Employer Check My FICO Score?

Usually an employer will look at just your credit history and not access your credit score. The employer is looking for an indication that you may be a risk to the company. If you are severely behind on payments, have any recent foreclosed properties or judgments placed on you, you may not qualify for the job offer. The companies tend to look at a longer period of history than a lender would.

Does an Employer Credit Check Hurt My FICO Score?

It will show on your credit report that your company pulled your report under the inquiries section of the report. However, there are often a number of inquiries made on your credit report by different companies who then send you credit card offers. The only way that an inquiry will affect your score is if you apply for a loan or credit card. If you apply for several of these at the same time, you may lower your credit score. Since your employer is just looking at your credit history, it will not affect your credit score or your FICO in any way.

Improving Your Credit Report to Qualify for Employment

If you did not receive a job due to a poor credit history, you can work to improve your credit score. However, it may take time to do this since companies look at long-term decisions and situations. Begin by catching up on your payments and work towards paying off any judgments you have on your account. If you know that your credit report is poor, you can explain what happened, which may affect the employer's decision. For example, if you defaulted on a loan due to losing your job and you have a good credit history before then, the employer may overlook it.