Credit Reports and Employment Background Checks

For jobs that require a high degree of trust and responsibility, a background check is required. Part of that check includes a review of your credit report.

In the business of finance, credit reports are critical to the hiring process. You would not want someone handling your money if they could not manage their own! The credit report can tell us a lot about our potential employee. It gives us insight into how responsible they are with their money and credit. The thinking is, if someone is responsible with their own money, they will be accountable and reliable when given responsibility for your money.

But, right now, it can be difficult to find someone who has been unemployed for a while with perfect credit. We are seeing people with a number of credit issues applying for jobs. The bottomline is: Honesty is the best policy. My HR team appreciates when an applicant is upfront about their credit status and speaks to us about the deficiencies in their report. In example, “I have been out of work for six months and had to make several concessions to my budget to make ends meet for my family. I have one Visa account that is 30 days in arrears and I am two months behind on my mortgage. I should be able to bring these items current within two months of being hired.”  In these recessionary times, we need to be flexible and do our best to see the entire employee and not focus on one or two aspects of their past credit behavior. If someone were to be upfront with us regarding their past credit, we would appreciate their honesty. It is best to know ahead of time and not be surprised than the other way around.

Credit checks or inquiries for employment do not show up on credit reports requested by employers or creditors. Where you apply for work is none of their business. Those inquiries only appear on your copy report if you request it from a credit bureau or if you order it through WWW.AnnualCreditReport.com.

A person has the right to add a 100 word statement to their credit report at anytime should they feel the need. In the case of someone being unemployed or underemployed for a length of time, one could place a message on their credit report with all three credit bureaus that they were unemployed from xDate to xDate and had to allow some bills fall into arrears.  The message will stay on the report for 7 years. This message also plays for someone who was disabled and unable to work for a time. These messages will not help you access further credit, but may be helpful in accessing employment or rental housing. 

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