Will Your Job Check Your Credit Score

It’s a common myth that your credit score can keep you from getting a job or promotion. While your current or a prospective employer may check your credit, they’re not checking your credit score. In fact, a credit score may not even be useful to an employer because it doesn’t provide the information they need to make a decision about you. An employer wants to see your credit information, so they receive a modified version of your credit report that shows your debt and your payment history.

What Do Employers Check for With Credit

While credit card issuers and lenders check your credit to measure the risk that you will default on your loan obligation, employers have another motive for looking into your credit. They’re signs that you may be a risky employee or someone who may commit fraud or theft.

Employers are looking for certain red flags. For example, several late payments may mean that you’re not organized. Having a large amount of debt may indicate you’re at risk of committing fraud or theft. If you’re required to be responsible for large amounts of company money or consumer information, employers look to your credit to see if yo show signs of mishandling your own finances.

Rules for Employment Credit Checks

An employer can’t check your credit history without your knowledge or permission. Instead, they’re required to have your written consent before accessing your credit report. You also don’t have to worry that an employment credit check will hurt your credit the same way a loan or credit application would affect your credit. Employment credit checks are a soft pull on your credit, so you’re the only one who sees the inquiry and it’s not factored into your credit score.

Employers are required to tell you in a pre-adverse action notice if they may deny your employment application because of information on your credit report. The notice must also give you a reasonable amount of time to explain the information on your credit report or try to fi it with the credit bureaus.

If the employer ultimately decides to reject your application because of information in your credit report, they’re required to send you a post-adverse action notice. This notice tells you the information that led to the decision, gives you the name of the credit bureau who provided the report, and gives you 60 days to access a free copy of the credit report used in the decision.

Preparing for an Employment Credit Check

Not all jobs will check your credit. If you’re going for a financial position where you’ll deal with sensitive customer information or confidential company information, you’re more likely to go through a credit check. Positions that require security clearance may also require a credit check.

If you plan to apply for a job soon or you’re going up for a promotion, you should check your own credit report first. You may be entitled to a free copy of your credit report from all three credit bureaus if you’re currently unemployed and you’re planning to look for a job within the next 60 days. Otherwise, you can access your free credit report through AnnualCreditReport.com. And if you’ve already used your free annual credit report in the past 12 months, you can purchase all three of your credit reports from any of the major credit bureaus - Equifax, Experian, or TransUnion - or from myFICO.com.

Checking your credit report before a job search is also a good time to look for any errors on your credit report. You can dispute errors by writing to the credit bureaus and requesting the inaccurate information be removed from your credit report. Check your credit report as far in advance of your job search as possible so you have time to get your credit in good shape before you start applying.

Monitoring your credit report regularly keeps you in the know about where your credit stands. It also gives you a chance to proactively clear up negative information that would lead to a denied application.