Credit score vector meter concept

Like it or not, many employers conduct credit checks on new job applicants before making a hiring decision. This is even more true for job positions within sectors such as financial management or any other managerial position where cash flow is a constant. 

Do you have bad credit from a few previous mishaps in your life? Are you worried about how employers might view you as a potential candidate? Don’t worry; you can use safe, accurate tools on the world wide web that can help you pinpoint your credit score details. This way, you can better prepare an explanation to a hiring manager if the subject ever comes up in an interview.

Information.com is an online reverse search engine that allows users to access multiple data sources at once on many different subjects. So not only can it be used to determine crucial elements about things in your life that you might have forgotten, but it can also be used to get information on people in your neighborhood or someone new you met just recently.  

This article will look at some reasons why employers conduct background checks on new applicants and what this might mean for you and your job hunt. 

Why Employers Check Credit: Some Specifics 

When you want to know why employers check credit, it’s important to know that credit checks are a rough estimate of how prospective employees deal with money in their everyday lives. This showcases how trustworthy and reliable someone might be. Conversely, someone with a large amount of debt might not be the best hire for jobs where finances are in question.

Legally speaking, credit checks are not required by law. However, individual companies may or may not have policies on whether or not they apply for certain positions. A practical example is doing a credit check on someone for a managerial position where proper bookkeeping is essential to daily operations. 

Financial sector jobs, such as mortgage brokers, stock brokers, and money lenders, have high standards when it comes to hiring. For example, many of these positions require professionally-licensed individuals on a state and federal level. Additionally, most of these positions will require some form of pre-hire credit check by law due to the sensitive nature of those jobs. 

How Far Back Does a Pre-Employment Credit Check Go?

Credit checks for a new job are under the auspices of the Fair Credit Reporting Act and can only check credit history for up to seven years. This rule is only ignored if the position pays $75,000 or more per year—in this particular instance, credit can be checked for up to 10 years.

If you’ve previously dealt with bankruptcy in your life, then the FCRA allows for those to be reported for up to 10 years. Again, this is regardless of what the job you are applying for happens to pay.

This might seem invasive, but it’s to assure your prospective employer that you are someone who pays attention to what they financially owe and if they are responsible enough to pay on time. Proof of responsible behavior such as this is crucial for staffing positions that manage large amounts of money.

An employer is always obligated to give you a written notification plus your written consent to conduct a credit check. The employer must allow the applicant enough of a timeframe to respond to a negative credit check to explain the situation accordingly. Also, if you are not chosen for a position due to a bad credit report, the company that interviewed you has to tell you in writing.

Not every state has the same credit check standards. Some even outright forbid them or make them much less comprehensive. Some cities, such as Chicago, New York, and Philadelphia, have pre-employment credit check standards regardless of a state mandate. 

Does a Pre-Employment Credit Check Lower My Credit?

A pre-employment credit check is what is known as a soft inquiry. A soft inquiry is a credit check that is equivalent to when you check your credit score. It is not as harsh as other variations of credit checks, such as bank or business loans. This kind of credit check is called a hard inquiry. 

So if you’re worried about your credit getting even worse just because you’re applying for various jobs, rest easy. Not much damage is going to occur because of these relatively minor checks. 

What Does a Credit Check Actually Show?

A credit check will show a few key things to a prospective employer. They are:

  • One’s full and legal name, including any previous names used in the past and names that might have changed due to a marriage or a divorce.
  • Current and previous employers.
  • Current and previous places of residence.

However, the real meat of a credit check is the hard data on one’s credit history and usage. These are:

  • Collection agency data (such as unpaid bills).
  • Bankruptcy history, past and present.
  • The number of credit accounts currently open and their requisite payment histories. 
  • A credit utilization rate, which is the applicant’s current level of debt percentage in regard to the amount of credit they readily have available. 
  • Any other data pertinent to credit-collecting.

What Information Does a Credit Check Not Show?

The scope of this information will be based on the credit reporting company itself, and this can vary widely. That being said, there’s some information that will never show up on a credit report. These are:

  • Age (to prevent ageist discrimination)
  • Current income
  • Marital status
  • Race, religion, and ethnicity
  • Political affiliation
  • Data concerning paid and unpaid medical bills
  • Any other public record other than bankruptcy

I Want to Do a Background Check On Myself. What Do I Do?

Credit scores are not typically shown on a background check; however, not all employers have the same lax standards. Some will go even deeper than a cursory background check and dive deep into an applicant’s credit history. It depends on what background check agency someone uses on a potential employee. 

Conducting a background check on yourself in tandem with checking your credit score is a powerful pre-interview tactic, especially if you’ve had financial difficulties or have a past criminal history (or both).To perform a background check on yourself, we suggest using Information.com, as you can pull up a complete background check on yourself quickly and easily.

Wrapping Up

Proper preparation for an interview is half the battle. If you are worried that your credit score might not reflect you in the best light possible or any other blemish on you as a person, then it is prudent to run a background check on yourself. This way, you can prepare an adequate defense of yourself for whoever is interviewing you for the job position you are seeking. Accurate search tools are at your disposal from the comfort of your home. So, don’t leave yourself in the dark; run a search today and empower yourself to make a great first impression for your next job.

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