Credit reports are not just for approving a borrower for a loan, they can also be a screening tool for job applicants or any other area that uses background searches. This occurs because credit reports also contain demographic information, such as a person's employment history. Jobs listed on your report, however, won't affect your credit standing directly, but can hurt other aspects of your life.
Why is Employment History on a Credit Report?
Lenders have the option of reporting information on a credit application to the credit rating companies, including information about your address and employer. Future employers may run a credit check, if you authorize it, and compare your stated employment history with previous employers listed on your credit report, according to Credit Builders Alliance.
Impact
Employment history has absolutely no effect on your credit report -- either good or bad, according to Experian, one of the major credit bureaus in the U.S. Employment history and salary were factored into credit scores during the 1980s, but the credit bureaus stopped this practice because salaries were self-reported and unverifiable. Also, employment says nothing about a person's willingness or ability to pay bills.
Considerations
Employment history can factor into whether or not you get credit. Banks will look at your employment history to ascertain your financial stability. If you bounce around jobs every few months, the lender can consider you unstable and too risky to handle credit. Other people who pull your credit report, such as an employer or landlord, can also view a sporadic or unstable employment history as suspicious or risky.
Tip
Pull your credit report from each of the three major credit bureaus to review your employment history -- you get a free one each year from all three bureaus. If you find false employment data, you can dispute this information with the bureau or have it removed completely, if you do not want it on there. Most credit reports contain erroneous or outdated employment history, according to the "The Wall Street Journal."
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