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Do Employers Look at Credit Reports?

Do Employers Look at Credit Reports?

When you're looking for a new job, your credit report may be the last thing on your mind. But before hiring you, potential employers may ask you to authorize a background screening as part of the application process. That screening could include checking your credit report.

Employers are most likely to check credit when the job you're applying for requires you to manage finances or handle sensitive data. But some cities and states limit whether, and to what extent, employers can use credit history in hiring decisions.

Why Employers Check Credit Reports

Your credit report is a chronicle of your financial history, including the loan and credit card accounts you've applied for and opened, how long you've had them, and whether you've made payments on time. Financial institutions use this information to determine whether you can be trusted to repay loans or pay credit card bills as required.

Can You Be Rejected for a Job Because of Your Credit?

In most states, it is possible for an employer to decline to hire you due to your credit history. It can be the sole reason for the rejection, or a single contributing factor among many.

The Bottom Line

If you're likely to be subject to a credit check when applying for a job or promotion, knowledge is power. Look at your credit report as soon as you begin a job search so that you can correct any mistakes, or improve your credit using time-tested strategies like paying all bills on time. That will help ensure that poor credit doesn't get in the way of your dream job.


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