More employers running credit checks
July 28, 2009
More and more employers are starting to do credit checks on their job candidates. This seems to have led to uncertainty on the part of job seekers who wonder why their potential employer is conducting a background check and what effect that check will have on their credit.
Employers may check your credit history for a variety of reasons. In particular, if you have applied for a job handling money, your employer will likely want to know how you’ve handled your own finances. Other jobs, such as with the federal government, may be high security, and you may be considered at risk to take a bribe if your finances are poor.
You must sign a form giving the interviewer permission to pull your credit reports, so you will know if the employer is going to run a credit check.
If you have a poor credit history, be prepared to answer any questions your potential employer may have.
These types of credit checks do not hurt your credit score.
There are two types of inquiries that can show up on your credit report, hard inquiries and soft inquiries.
Hard inquiries are the credit checks that are made when you’ve applied for credit. These types of checks could be made by a credit card issuer or a bank if you have applied for a car loan or a mortgage. Hard inquiries do put a little ding in your credit score.
Soft inquiries are credit checks made by you, your potential employers or creditors you already have accounts with. These soft inquiries will not have any effect on your credit score.
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