Credit & Getting a Job

If you are applying for jobs, be prepared for the dreaded credit check. Not all employers run them, and not all use them in the same way, but it is a good idea to know what is on your report before you let your future boss see it.

Employer Credit Checks

While some states now restrict the use of credit reports in making hiring decisions, many employers rely on them. Credit checks provide employers with information that can confirm a worker's employment history as well as information about how they manage their finances. The priority placed on credit reports as a factor in hiring decisions varies by employer, but they are often used to screen candidates who may be handling money.

High Salary Credit Checks

While the credit report provided to employers is similar to credit reports pulled by other creditors, if the candidate for a position is to be paid over $75,000 per year, their credit report can contain negative information that is older than the usual 7-to-10 year federal credit reporting limits. This means that if you filed for bankruptcy 15 years ago, and you apply for a high-salary job, it may show up on your employment credit report.

Free Credit Reports

First, check your credit reports before you go on the job hunt. If they contain untrue negative information, you need to get it deleted. If the information is true, you need to be able to address it if an employer asks about it. You can get a free copy of your reports every 12 months from annualcreditreport.com. If you have already claimed your free reports for this year, but are unemployed, you can request additional free reports directly from each credit bureau.

Your Rights

An employer cannot look at your credit report without your permission, and if you are denied a job because of what is on your report, the employer must tell you this, as well as the name of the credit bureau that provided the report. For 60 days after the employment denial, you can request a free report from that credit bureau.

Damage Control

If a potential employer wants to run a credit check, and you know that your report contains negative information, take action. Be prepared to explain the negative information on your report: If you were the victim of identity theft, suffered a family crisis, or had health problems, tell the hiring manager or human resources representative about your situation and offer to document it, if necessary. If your credit problems are due to your living beyond your means, you might still be able to save a job offer by demonstrating that you are taking actions to curb your spending and pay down your debt. One way to do this is to enter a credit counseling program.