Technically, the information in your credit report is only supposed to be used for determining what sort of credit risk you are. However, in real life, the information in your credit report is being used for all sorts of things. This is because your credit report is considered an indication of your fiscal responsibility — and even your level of responsibility in other areas of your life. Indeed, you might find that even your employer is interested in what’s in your credit report.
Why Your Employer Might be Interested in Your Credit Report
There are a number of reasons that your potential employer might be interested in your credit report. Your credit report is a history of your financial habits, and it can also be an indicator of what the employer can expect from you. Here are some ways that your credit report might influence an employer:
- Security risk: If the company is involved with sensitive information, or if the company deals in patents or intellectual property, the employer might be worried that a poor credit history indicates money problems. And those money problems might leave you open to bribery.
- Embezzling: Again, indications of money problems might prompt some employers to worry about the chance of embezzling. This is an especial concern if you are applying for a job that allows you access to money.
- Work habits: It may not be fair, but increasingly your character is being judged with help from a credit report. You might find that your prospective employer wants to form an idea of your diligence and level of responsibility. A credit report, which purports to show your level of financial responsibility, could be seen as a general indicator of what you are doing with your obligations.
Employers cannot, however, just pull your credit report without your permission. You have to consent to have them look at your credit history. While it may not cost you your job to refuse, some employers might take your reluctance as a red flag.
Improving Your Credit History
Because so many people are interested in your credit history, it is a good idea to improve the way you look on paper. You can do this by paying your bills on time and reducing your credit card debt. It can also help to check your credit report for errors; sometimes mistakes can lead to a history that appears more negative than it really is. You can dispute errors, and fix your credit report so they are removed. You can also submit a statement, to be included with your file, explaining extenuating circumstances that might have led to a negative item in your credit history.
Right or wrong, your credit history is increasingly important. Snap decisions about your financial future can be made based on this information. Additionally, insurers, landlords and even employers are interested in your credit history. If you don’t take the interest in your own credit report — and making sure it shows you in the best financial light possible — you could find yourself passed over for a job.