If you’re reading this article, you’re obviously thinking about whether your current or future employer is going to check your credit score. What could your credit score tell your employer and why would they want to know?
Mid to senior level management positions often require employers to check your credit report. They often do not look at your credit scores since that’s reserved for banks and other lending institutions. Companies do this for reassurance and to verify whether you’re a likely candidate for their company.
Businesses look for two prime reasons:
- To understand your financial management habits
- Verify your creditworthiness.
These two factors are important not only for your credit however it gives the company an indication of how you manage your finances and therefore everything else.
Your credit report shows employers any past missed payments or foreclosures. They can digest this information and decide whether you’d be a good fit for their company.
Employers receive an abbreviated version of your credit report that does not violate equal employment opportunity laws. Therefore any checks they perform will not damage your credit score.
What Will My Report Tell Employers?
Typically, your credit report is viewed as a reflection of your overall level responsibility and trustworthiness. Due to this many employers want to review your credit report before offering you a position.
An employer may review candidates’ credit reports to decrease the likelihood of theft and embezzlement.
The Society for Human Resource Management’s 2012 survey indicates 47% of employers check potential employee’s credit history routinely. The major concern employers sought information on was whether the candidate’s credit history indicates theft or embezzlement. Their overall goal was to reduce legal liability for negligent hiring.
Prior to employers checking your credit history, they require your consent. In fact, an employer can’t be see your personal information, for instance your account numbers, etc. They receive a condensed version of your report to protect your privacy.
If you’re curious whether your state allows employers to check your credit report, check here: 11 states prohibit employers from checking reports.
Keep your report and score in good shape
The good news is 80% of those companies who checked candidate’s credit reports did not reject their applications, even those with low credit scores. While a low credit score may not prevent employers from hiring you, you should do everything in your power to keep them high.
The better your scores the lower your interest rates on credit cards and loans will be. In addition, you’ll spend less money paying off future loans.
If you would like to boost your credit scores quickly, contact Better Credit today and speak with one of our credit repair experts. When you call us we will answer any questions you may have and being to improve your credit scores.
Here are a few ways to keep your credit score high:
- Pay your bills on time.
- Avoid using more than 30% of your available credit on any card at any time.
- Apply for credit only when necessary spread out applications for new credit cards (3-6 months).
- Monitor your credit report regularly. Check scores annually https://www.ftc.gov/faq/consumer-protection/get-my-free-credit-report
- Dispute any errors
What Do I Do When Applying For Jobs?
The next time you apply for a new job, your credit report isn’t the first item they will verify. Once they have selected a small pool of likely candidates, and generally after the interviewing process, then your credit report may be checked. Employers do not want to waste resources checking your credit if they aren’t interested in hiring you. Therefore, depending on their process once they’ve brought you in for an interview, it’s a safe bet they’ve already prepared to hire you, should the interview go well.
Better Credit suggests you take the initiative to verify that your credit report is accurate and free from errors. In our experience there’s always room for improvement in one’s score. Check with us today to see what we can do to increase your credit score.