Why do many employers look at job candidates’ credit score/history? How does a person’s credit score or history affect his or her ability to do a job (or how is it perceived to do so)?

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Posted by Evan Sachs (MONEY FORUMS: 2, Answers: 3)
Asked on January 17, 2018 1:15 pm
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Great question. Let’s take this piece by piece.

First, employers cannot get your credit score. Nor do they need to. They may be able to get a credit report, but it is a somewhat limited version. It cannot contain information such as your marital status or account numbers. It can contain your payment history and available credit. Less than half of employers (nationally) use credit checks, less than ten percent use them for all applicants.

State laws may be stricter than national laws, with ten states presently imposing additional restrictions on employer’s access to your credit information.

There are a lot of myths around this. So here are some simple truths.

There are generally two reasons prospective employers want to see your credit history. One, is it can be a red flag. If you are going into a job where you would handle money, but you are drowning in debt, you represent a higher risk – and they may wish to pass. Or you could have financial responsibility for an aspect of the business while not having managed your own financial affairs – again an issue of risk.

The second is to protect themselves. If something goes wrong down the line and you and the business end up fighting in court they want to be able to say they checked everything they could on you. Basically, it’s a CYA for them.

Additionally, many employers really have no idea what they are seeing on credit report. So they may not do anything other than get it. Maybe if they see a bankruptcy it means something, but they can’t tell very late from slightly late, or late often from late infrequently, So they get it and stick it in your file.

If you are going to handle cash or have fiduciary responsibility for an organization bad credit can be an obstacle. In many cases, even when a credit report is pulled, it doesn’t mean a lot. The best thing a prospective employee can do is be upfront and honest when asked about providing credit. Sure you can look – here is what you’ll see and why.

Bad credit may keep a person from getting hired by some – but not all -employers.

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Posted by Peter Neeves (MONEY FORUMS: 1, Answers: 59)
Answered: January 24, 2018 5:53 pm