“Credit scores typically do not show up on a background check. Most background checks for employment do not seek credit information, but rather, criminal history. They are typically looking for whether you are dangerous to employ. “Some pre-employment screenings do go deeper and look at credit.
The short answer is no, your credit score doesn't usually show up on a standard background check — though sometimes landlords may submit a request for a credit score separately. (You'll have to give your written permission for them to do so.) But your credit history could still affect your application.
Banks and other financial institutions use credit scores to determine if you meet their criteria for a loan or a credit card. However, a credit score is used for more than financial matters; it may also be used to determine if you qualify for a job. It is possible to be denied a job because of bad credit.
Your credit score won't be affected by a potential employer conducting a credit check on you. “An employment inquiry is treated like a soft inquiry,” Ulzheimer says. “Not visible to other parties (other than you) and not considered in credit scoring systems.”
Again, a credit check likely won't affect your chances of getting a job unless you're pursuing a financial or management position or may be privy to sensitive information. If you plan to work with a company's finances, the hiring managers want to make sure you handle money responsibly.
A credit check reveals certain information about an employee, especially in relation to his or her finances. Usually, an employer will have access to information like the employee or candidate's credit card and debit card debts, payment and default history, details of any delayed payments, loans and so on.
A CareerBuilder survey found that 72 percent of employers conduct background checks on all the employees they hire and, of those, 29 percent check credit reports.
Unfortunately, while federal laws prevent discrimination in the workplace regarding race and gender, no such laws exist to prevent being denied a job due to poor credit history.
In a Nutshell
In the majority of states, employers can deny you employment if you have bad credit. Some states and cities have passed laws that prohibit the practice, though there are some exceptions, such as for jobs in the financial sector.
Employers sometimes check credit to get insight into a potential hire, including signs of financial distress that might indicate risk of theft or fraud. They don't get your credit score, but instead see a modified version of your credit report.
An employment credit check is when a potential employer checks your credit history to see how you've handled consumer debt. The credit check includes your credit history and personal information like your name and address. The FCRA sets standards for employment credit checks.
There is no minimum credit score requirement to get a job in finance or with the government. Instead, it's important to make sure you develop and practice good credit habits. If you're behind on payments with one or more accounts, get current as quickly as possible.
FICO considers a credit score to be poor if it falls below 580. According to FICO, a person with a FICO score in that range is viewed as a credit risk. Why? Their research shows that about 61% of those with poor credit scores end up delinquent on their loans.
Employers are most likely to check credit when the job you're applying for requires you to manage finances or handle sensitive data. But some cities and states limit whether, and to what extent, employers can use credit history in hiring decisions.
If your state prohibits employers from checking applicants' credit reports or using their credit histories in hiring decisions, you are protected. Even though the federal FCRA allows employers to consider credit reports, state laws that are more protective of employee rights override the federal law.
What's in the law: The Stop Credit Discrimination in Employment Act prohibits employers from requesting a credit check or inquiring about an employee or job seekers' credit history when making employment decisions for most positions.
You have late or missed payments, defaults, or county court judgments in your credit history. These may indicate you've had trouble repaying debt in the past. You have an Individual Voluntary Agreement or Debt Management Plan. This might suggest that you can't afford any more debt at the moment.
Three companies play a major role in consumer credit across the United States: Experian, TransUnion, and Equifax. These three major credit-reporting companies, also called credit reporting bureaus, track US consumer credit data that generates your credit score.
Although ranges vary depending on the credit scoring model, generally credit scores from 580 to 669 are considered fair; 670 to 739 are considered good; 740 to 799 are considered very good; and 800 and up are considered excellent.
An employer might check on information such as your work history, credit, driving records, criminal records, vehicle registration, court records, compensation, bankruptcy, medical records, references, property ownership, drug test results, military records, and sex offender information.
As a bank teller, you're dealing with financial instruments and sensitive information all day long. There's no getting around it; banks perform background checks on job candidates, and a credit check is part of that process.
If you are looking for new job opportunities and an employer conducts a credit check and notice that you are under debt review, you need not panic or lose heart as this should not affect you from getting your dream job. It is the employer's choice on deciding what requirements are when hiring for certain positions.