credit score, SACS Consulting

Can Your Credit Report Cost You a Job Opportunity?

Yes, it can. An adverse credit report can cost you a job and even a promotion. However, federal law under the Fair Credit Report Act makes this process transparent and fair to you.

Employers are most likely to check credit for those positions in finance, management, or the government.

According to the Professional Background Screening Association:

  • 47% of employers do not run credit checks on any of their employees
  • 31% of employers run a credit check on some employees and
  • 22% of employers run credit on all of their employees.

What is the Process?

Employers can run soft credit checks on you that do not impact your credit or credit score. However, current and past employers may appear on this report if those employers did a credit check on you. While listing these employers does not impact your credit score, it might affect your credibility if you leave some employers out on your LinkedIn profile or resume.

The report does show your payment history, the amount of credit you owe, and the available credit you have on your credit cards.

Employers must obtain written permission from you to conduct this check. The permission document must be signed by you, and be clear they are running your credit. In other words, the document cannot be included with additional background checks.

When the report returns to the employer, they must provide you with a copy of the report. You have an opportunity to explain or dispute any negative information before the employer can withdraw their offer.

If an employer violates this process, the Federal Trade Commission can levy a fine of $1,000 per infraction. In addition, if you sue an employer for such a violation, you can be awarded punitive damages and coverage of your attorney’s fees.

How can You be Proactive?

  1. Check and review your credit report with such tools as AnnualCreditReport.com.
    You can check it for free annually and report any errors to one or all of the three credit bureaus.
  2. Pay your bills on time.
  3. Don’t amass considerable amounts of debt.
    Credit experts suggest using only 30% of your available credit on your credit card.

Need Help with Your HR Policies?

Our team can help you review and update your existing documents, including the credit report request. We will ensure your employee manual will cover all the bases from hiring to termination. It will consist of the policies and procedures that reduce your risks of ending up in court or out of business. Contact us to speak with one of our HR Policies specialists today!