Nowadays, it is not enough to write a compelling cover letter and resume. You also need to be able to show a potential employer that you are good with money. Otherwise, they might think that your debts will affect the way you perform in the job. It is also one way for employers to see financial distress that might indicate a risk of fraud or theft. But don’t worry; employers only see a modified version of your credit report and not the credit score itself.
Should you worry about what your employers will see in your credit report? Many companies now use credit score solutions to get an insight into their clients’ eligibility and profiles. This helps protect them from possible fraud. At times, they may also use this service to assist present employees and look into the hireability of a person.
What Do Employers See in Your Credit Report?
Unlike lenders, employers cannot see your credit score. The modified version of your credit report, which credit rating companies will provide, gives employers an insight into your spending. The credit report that employers see will contain personal information to confirm your identity, your social security number at times, loan and credit card accounts, your balances, available credit, and payment history. It should not show your credit score, specific account numbers, and information about your spouse.
Employers also use a credit check for security purposes. It is one way of verifying someone’s identity, educational background, and previous employers. It may help convince potential employers to hire you.
Why Should Your Finances Matter to Employers?
According to research, more than half of employers do background checks during the hiring process. The number one reason for this is because they want to protect their clients and present employees. In general, employers want to know if you can handle your finances well. They gauge the potential employees’ trustworthiness on the way they handle their money. For them, employees who can skillfully budget their money are more likely to make the same practical and smart decisions when it comes to their jobs.
When your credit report shows that you make many late payments, it will signal irresponsibility and your failure to live up to agreements. Meanwhile, financial distress is seen when you have a lot of debts and have excessive credit. Employers will see this as a sign that you are more likely to commit theft and fraud because of pressure to pay your debts.
Imagine, then, if your job has something to do with money or if you’re applying to a financial institution. It will not bode well for your image or the company’s image if you are mishandling your own finances. The National Association of Professional Background Screeners said that 25% of human resources professionals would credit check some positions, while 6% said they check the financial status of all applicants.
Credit checks will most likely be done on positions that involve money, sensitive customer data, and confidential company information. When you get a promotion, you will also have to go through a rigorous financial screening to make sure that your employer can trust you with the company’s finances. That’s why it’s better to take care of your finances well because it will also affect your employability.
Can You Get Rejected Because of What’s in Your Credit Report?
In most cases, it is the prerogative of the employers why they choose to hire or not hire a candidate. What’s in your credit report may be the sole reason they reject you, or it can be one of the contributing factors. But unless the report indicates how bad you are in handling finances, no employer will make it the single reason they won’t hire you.
Remember that your hireability will be based on a lot more factors than your credit status. The hiring managers will evaluate the relevance of your previous employments and your educational background. Also, you should be aware that some states—California, Washington, Colorado, Hawaii, and Maryland, among others—limit the employers’ ability to factor in credit checks when making hiring decisions. If you know your rights, whatever’s in your credit report cannot be used against you.
Taking care of your finances isn’t just about your own financial health. It will also affect your ability to get a job and eventually pay off those loans. So, making sure you handle your money well is a testament to your discipline, which employers wish to see when hiring anyone to work for them. Be aware of your finances and take the necessary steps to maintain them.