Did You Know Employers Check Credit History?

When you apply for a job, you know interested employers may call your references, but you may not be aware that they may also check your credit history. That is especially applicable when the position is based in finance. However, there are other reasons companies choose to check applicants’ credit history.

Why They Check

Background checks can reveal the basics such as criminal records and driving history. Credit checks can also reveal whether you can be trusted with money. There are various companies that offer credit check services for employers.

Credit histories can reveal more than your financial planning. For example, a slew of late payments may indicate poor organizational skills or a lack of deadline adherence.

What They Check

However, do note that they can only pull your credit report, which shows debt amount and late payments, but not pull your credit score. A credit report shows available credit, payment history, and financial standing.

The report would also omit any information such as marital status or birth year, which could potentially violate equal employment laws.

Who Are Checking

While most employers ran some form of background checks on potential hires in 2018, only 16 percent checked credit history on all candidates, according to the National Association of Professional Background Screeners.

However, the percentage of employers screening all full-time employees is rising. In 2018, 86 percent of employers screened all their full-time workers, compared with 83 percent in 2017.

One main reason those employers ran background checks was to protect clients and employees. A few other reasons for background checks included protection of firm reputation and improvement of quality hires, as well as prevention of theft, fraud or embezzlement.

If your credit history is less than stellar, do not fret. Companies need your written permission in order to pull up your credit report. Lastly, a bad credit history will not automatically disqualify you – companies have hired applicants with bad credit because they had the right skills and temperament for the job.