Hearing that your future or potential employer is doing a credit check can be a scary thing. Some of us have less than perfect credit, but are more than good enough for the job we are applying for. But we worry that the less than perfect credit may impact our ability to get that position. So what is it that you employer is looking for when they do a credit check?
As strange as it may seem, looking at your credit report shows your employer a lot of different things. It's not just a case of them looking at the score. They are looking at the finer details of your credit report, the items that can tell them the type of employee you could potentially be.
Your trustworthiness. Looking at how often you default on accounts can show your employer how trustworthy you are. If you are frequently changing cell phone companies due to outstanding balances, the employer may not want to hire you.
Defaulting on your accounts also shows them that you can not be relied on. If you cannot be reliable in paying your outstanding debts, what makes them think you will be a reliable employee.
Another thing that is often on your report is your addresses for the last 3-5 years. If you've moved around a lot, the employer may look past you, as they don't know how long you'll stick around.
They also use your credit report as a way to ensure that the SSN that you provided is the correct one for you. This can protect them.
They will also get to see your income debt ratio. Some employers, especially those that deal with cash, will not hire someone with a high debt to income ratio, it's just too risky for them.
A potential employer may also decline you if you have a bad credit history as this shows a lack of responsibility.
As you can see your credit report can tell a potential employer quite a bit about you. And some of those things may make them think twice before hiring you. Some of them may even cause you to be declined for the position all together.
This is why being responsible with your credit and debt is extremely important and can impact your life in more ways than you may think of initially. Responsibility is key. Treat your credit nicely, and it will treat you to many things in life. Mistreat it and you may find it comes back to bite you.