Can Your Financial History Affect Your Employment?

Can Your Financial History Affect Your Employment?

When you look for a new job, some of the most important considerations include your educational level and your work experience. Although you might be confident in your qualifications, signing your name and authorizing a credit check by your future employer unnerves you. Why do they need this information and is it relevant to your employment with them? This is a little understood area of employment applications, and this information might clarify the confusion.

Limited Access but It Tells All

There are several agencies that run credit check services for employers, and they only release the debt and payment history. The potential employer does not receive your actual credit score. The employer uses this information to evaluate your position with regard to theft, fraud, and financial risk. Perhaps you have applied for an accounting position. Your own personal transaction history may be a clue as to how you will handle other financial situations.

Not Every Company Requires One

If you have poor credit and are worried how it might impact your job hunt, you will be relieved to know that not every company required a credit check. Most often, it is the businesses that require a lot of security clearance, access to money, or dealings with customer’s sensitive data that will expect a report. Unfortunately, they use the information to gauge how responsible you are, how committed you are to meeting obligations, and your propensity for being careless with resources.

It Doesn’t Hurt Your Score

The checks made by employers are considered soft checks, and they do not affect your credit score. You will be able to see any soft inquiries that are made on your report, but a potential employer cannot see where another company may have conducted a similar check.

As long as you are notified and agree to the terms of the application, it is legal for an employer to check your credit. If your credit score needs some work, take steps to increase your score and open future employment opportunities.