Can My Employer Check My Credit Score?
by Maurie Backman | April 29, 2019
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Job hunting is a stressful prospect in its own right. Not only must you craft the perfect resume, but you'll also need to hone your interview skills and be extremely persistent if you want a shot at getting hired.
Now, you're probably aware that the more of an effort you make to network and boost your skills, the more likely you are to land a job offer. But did you know that your credit history could dictate whether or not you wind up getting hired?
Unfortunately, it's true: A checkered financial past could make it more difficult for you to get a job. Consider yourself warned.
Employers and credit scores
First, here's some good news: Potential employers cannot check your credit score, so that number is yours to keep under wraps. What companies can do, however, is check your credit report, which will give them a sense of what your personal financial background looks like. Specifically, a prospective employer will be able to see whether you have a history of paying your bills on time, or whether you have a tendency to rack up excessive debt and fail to repay it.
You might wonder why employers would care about how well (or poorly) you manage your own money, and the truth is that in many cases, companies won't bother checking your credit record -- especially if the job in question has nothing to do with managing money. However, if you're aiming to work in a financial field, or you're applying for a position that requires you to manage a company's money, then there's a greater chance that your credit history will come into play. And if that's the case, a bad credit record might hurt you. After all, if you can't stay on top of your bills, how can you be expected to handle a company's accounts payable or receivable?
Even if the jobs you're looking for don't involve money management in the slightest, an employer might regard your credit history as an indication of how responsible you are in general. And if that's the case, a sloppy credit history could lead an employer to think you're not to be trusted in a professional capacity.
Is your credit report even accurate?
Since there's a chance a potential employer might access your credit history, you should make sure those details are correct. It's estimated that 20% of credit reports contain errors, and the last thing you want is for a blatant mistake to prevent you from getting a job you'd otherwise be a strong candidate for. So get a free copy of your credit report -- you're entitled to one per year from each of the three major bureaus through AnnualCreditReport.com. Review the report for errors and report any mistakes you notice to the bureau that issued it.
Incidentally, reviewing your credit report every year is something you should do even if you aren't in the market for a new job. If your credit record contains a mistake, that error might make it more expensive for you to borrow money when you need to.
What sort of error might your credit report contain? Imagine there's another person out there with your name who racked up $5,000 in credit card debt and has been delinquent on those payments. If that debt accidentally gets associated with your record, it could drag down your credit and cause you a world of financial pain. Therefore it always pays to keep tabs on your credit record.
Will your credit report cost you a job?
While potential employers can check your credit record as part of the vetting process, the good news is that they generally can't do so without your consent. So if you have reason to believe that your credit report will paint an unfavorable picture, you may want to offer up an explanation before your prospective employer draws its own conclusions. For example, you might explain that you incurred a large amount of medical debt in recent years, which led to a history of missed or late payments. Or you might say nothing at all and hope your employer decides to look past your credit report if it isn't particularly sparkling. If you're an otherwise solid candidate, you may land a job despite your not-so-stellar record.
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About the Author
Maurie Backman is a personal finance writer who covers everything from savings to retirement to healthcare. Her articles have appeared broadly on major outlets such as CNBC, MSN, and Yahoo.
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