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What Is a Credit Check for Employment?

You might be surprised to know that your credit history can even have an impact on whether or not you are hired for a job. Many companies are now conducting a credit check for employment, This credit check is often part of a background check for potential employees. Pre-employment credit checks can be comprehensive reports from credit reporting agencies.

  1. Function

    • A credit check for employment functions primarily to help employers determine if you are a good candidate for a job. They often use credit report to help them decide if you are a responsible person. If you are applying for a job involving financial duties, the credit report will be used to help measure your competency in terms of handling finances.

    Employer Considerations

    • Employers will consider a few things to be of importance when viewing your credit report. Employers will most often be interested in details about your credit accounts. They will want to see that most if not all accounts are in good standing. These accounts should be paid before the due date each month. Employers will look to see if you have any credit accounts in poor standing. Most employment credit reports will show if you have any bankruptcies, judgments or any other adverse actions against you.

    Significance

    • Pre-employment credit checks are significant because they can prevent you from being hired for your dream job. It is legal for a company to reject you for a job position if you have a poor credit history. It is possible that you have financial problems even if you would be a good fit for the job. There is nothing you can do if you are not hired for a job based on an adequate credit report so long as the report was conducted with your permission.

    Your Rights

    • Even though a potential employer can use a credit report in their decision process, you still have some rights. They cannot run a credit check on you unless you provide authorization for the credit check. An employer cannot disclose information about your credit file to anyone who is not part of the hiring team. This information cannot be included in an employee file if you are hired. If an employer uses a credit report to determine if you are hired for a job or approved for a promotion, they must notify you if there will be an adverse action. This means they must send you a letter of pre-adverse action letting you know that you will not be hired or will not be promoted due to information found in your credit report.

    Benefits

    • An employer credit check can benefit you if you have an excellent credit history. If the decision between you and another candidate is very close, having a better credit report could be enough to land you the job. The same is true if you are competing with a coworker for a promotion to a higher job position.

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