Why Do Employers Look at Your Credit Report?

April 17th, 2017 | Author:

[I]f you’ve applied for a job, you may have been asked to provide authorization for the potential employer to look at your credit report. While you signed it just to be considered for the job, you may wonder why they need to know about your credit history. What are employers looking at when they review your credit report?

Honesty

Believe it or not, they may be looking at your personal information. Your credit report provides more data than just what kind of credit you have. It also lists all of the places you have lived and what jobs you have held. Some employers like to verify that the information you put on the application is the same as what is listed on your credit report. Some people try to cover up gaps in employment by changing the hire date or the end date with a company.

Just be aware that some of this information may be outdated on your credit report. It’s important to get a free credit report before you start job-hunting to make sure there are no errors that could hurt you in the process.

Security

Most employers don’t care what you do on your personal time or with your own finances, except in how it relates to their business. When an employer is looking at your credit history, they are trying to determine if you will be a good employee. Someone with access to cash who has a problem with making payments may be tempted to steal. An employer will look closely at credit reports when they are hiring for positions that allow a person access to money or accounts.

If you have past credit problems, you will want to explain them to your potential employer. Perhaps you can tell them you went through a debt counseling service to resolve those issues. You may explain that you had a significant medical problem, which resulted in unpaid medical bills.

Not all employers ask to review your credit report and they do not have access to your credit score. Just be aware of why they want to see it if they do ask for authorization.

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