Finding a new job can feel like a full time job in itself. You’ve done the obvious things like narrow down your list of companies and positions, and prepare your resume and cover letters. But did you know that your credit may also play an important role in an employer’s decision to hire you?
Employers might check credit reports during the hiring process in order to learn more about candidates. They may do so as a means to gauge how responsible you are with finances or to get an idea of how organized you are.
Not all employers check credit reports during their employment screening process, and those that do may only check reports for certain positions. According to NerdWallet, “Credit checks are more likely for jobs that involve a security clearance or access to money, sensitive customer data or confidential company information.”
They also don’t see the same information that a creditor would see when they pull your report. An employment screening report only includes your payment record, how much you owe, and your available credit. Potential employers can’t see your credit score either.
If your credit isn’t the best, don’t get discouraged. It doesn’t mean that you won’t be able to find a new job. Follow these steps to prepare your credit ahead of time, before an employer requests your report.
Get your own copy of your report
When you start looking for a new job, get a copy of your credit report. You can get a free report every 12 months from each of the three credit bureaus.
Review your report and make sure everything is accurate and up to date. If you see any wrong information, dispute it directly with the reporting bureau. If you have negative listings like a car repossession or defaulted account, these should only stay on your report for seven years.
Requesting your report ahead of time will help you know what to expect if the potential employer gets a copy of your report. You’ll also be prepared to discuss what’s in your report if you choose to do so.
Ask the HR department about credit checks
If you have negative credit listings and you’re concerned about the role they’ll play in your job search, contact the companies you’re applying to anonymously and ask if they check credit as part of their candidate screening process. If you think it will be an issue, you might choose not to spend time on applications for the companies that ask for your credit history and instead focus on those that don’t.
Know what your rights are
Although it is legal for potential employers to ask for your credit report, there are certain guidelines they must follow. They’re required to get your written permission before they request your report, and they also have to inform you that the information will be used in the decision-making process.
Employment screening report companies also have to tell you when they report negative information to an employer. You’re entitled to a copy of the report if it’s used as reason not to hire you.
Work on a long-term fix
The best way to prepare for future job searches is to prioritize improving your credit now. Keep track of your accounts and always make bill payments in full and on time. Do your best to use less than thirty percent of the credit that’s available to you. Make sure negative listings are removed from your report when they should be. Your job search will be easier in the future if you don’t have to worry about how your credit might affect your eligibility.