Can Bad or Fair Credit Affect Your Chances of Getting a Job?

Friday, October 4th, 2019
Updated: October 4th, 2019
The content is accurate at the time of publication and is subject to change.

It is no secret that the employers’ goal is to find a responsible and reliable candidate. And since a good credit history is one of the indicators of trustworthiness, HR specialists of some companies can check potential employees’ credit reports. Sometimes, credit checks may also be conducted by your current employer in case they are giving you a promotion. But the question is whether you should worry if your score is less than perfect.

Only a Third of Employers Turn to Credit Checks

To begin with, of course, not all companies practice this. Credit checks are more common in such spheres as finance, government, and other public service jobs. And no wonder, since employers simply need to secure themselves if the job involves working with money or confidential information. Still, there are other certain companies or positions applying for which you may face similar inspections.

According to the employer credit check survey carried out by the Professional Background Screening Association together with HR.com, 25% of the HR professionals request candidates’ credit reports from the credit bureaus only when hiring for particular positions, and just 6% always check applicants’ creditworthiness regardless of the vacancy.

Employer Credit Checks Cannot Impact on Your Score

Unlike credit card issuers and lenders, employers can only check a limited version of your credit report showing your payment history, available credit, and debt. The credit checks count as “soft inquiries”. This means that, first, no one can see any of those except you, and, second, your credit score can never be hurt by this.

Employer Credit Checks Are Regulated by Law

To your calm, there is a special document to regulate the process of employment credit checks – the Fair Credit Reporting Act or FCRA. It states that employers must inform candidates in advance and get written permission on conducting the credit check. Moreover, applicants must be given a copy of the report used to make the decision.

Besides the federal law, some states and cities restrict employers’ abilities to run credit checks for employment purposes or ban this action at all. For example, they may not be able to do a check on one selected applicant while exempting other applicants for the same job from this.

Employers Will Give You a Chance to Explain

Yes, it is quite possible that your credit history may be taken into consideration when applying for a job. Thus, you’d better try your best to keep your credit accounts in good standing. Anyway, in most cases, your bad or fair credit is not a crucial point. And sometimes even bankruptcy cannot prevent you from getting the desired position if you are truly a professional and were at your best during the interview. Also, note that, according to FCRA, employers should give you an opportunity to review the report and explain or dispute any negative information.

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