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If you’ve tried to buy or rent anything lately, then you know that your credit score is hugely important. But could a low score hurt your job search?
In many states, a pre-employment credit check is legal. While not every organization will pull up your score, they may have the right to do so. Check your state’s laws to be sure.
The employer will need to ask for your permission to order the report. However, if you refuse, that’s probably the end of your chances with that particular company.
The most common reason to check a candidate’s credit is if they will be handling money for the business. Someone who will be issued a company credit card, for example, needs to demonstrate fiscal responsibility.
Another potential reason is vulnerability to bribery. If you were applying for a government job where you handle sensitive information, then having a poor credit history could flag you as a risk.
However, a company doesn’t need a specific reason to pull your report. It could just be part of their standard screening process. Some employers will turn down candidates because of a messy financial history.
The logic is that people who can’t pay their bills on time will be irresponsible in other ways. It’s not necessarily fair, but in a market flooded by job seekers, hiring managers often use all the tools available to narrow the field.
One silver lining: These checks won’t impact your credit score. This isn’t like attempting to open a new line of credit. Instead, it’s a “soft inquiry” that won’t be recorded on your report.
The report is more similar to a background check; in fact, it might be part of the background package ordered by the company.
This report won’t actually show a numerical score. Instead, it will show your credit history. That’s why it’s especially important to request reports from the three major bureaus–Experian, Equifax, and TransUnion–to ensure that there aren’t any discrepancies or mistakes on your report.
If you know that your score could be a problem with a future employer, it’s best to be honest and upfront. The time to do this is when they ask for permission to run a report, not before the subject comes up.
Tell your potential employer about any major negatives they might encounter on the report. Try not to get defense. Everybody makes financial mistakes, and as long as you’re working on improvement, then you have nothing to be ashamed of.
