It isn't uncommon for employers to want a copy of your credit report.
Reference checks are common practice in the workplace. But what about credit checks? Do you expect a possible employer to run a credit check?
"Many, if not most, companies do credit checks," says Bettye Banks, Senior Vice President for Education in the Dallas chapter of Consumer Credit Counseling Service (CCCS), a non-profit community service that provides credit advice and debt management programs.
Employers want reassurances that employees won't be tempted to steal or embezzle.
What does bad credit have to do with job performance? Probably nothing. In fact, there's no evidence to prove that good credit equals good job performance.
But performance isn't the motivating factor. Honesty is. Generally speaking, employers want reassurances that their employees are honest and responsible, and credit records--however spartan or vague--do shed some light on a person's level of responsibility and personal integrity. More specifically, employers want to know if an employee will be tempted by the presence of money or other valuables that might be stolen or embezzled and used to pay off personal debt.
The most likely businesses to run checks, according to Banks, are businesses in which employees handle finances and other valuables or are subject to outside influence. For example:
- Government jobs with security clearances put a lot of weight on credit checks because someone with $30,000 of debt may be more likely to accept bribes or payoffs.
- Budgeting/accounting positions can be strict because employees may be tempted to steal or embezzle. What's more, an employee's ability to budget and manage his personal finances may suggest something about his professional abilities.
- Positions that require employees to physically handle money or other valuables want reassurance that employees won't be tempted while working around valuable items such as jewelry, clothing, prescription drugs, etc.
So what can you do to make sure your credit is in good standing? Or how can you resolve bad credit issues? According to Keith Unger, a Credit Counselor with CCCS's Washington, DC chapter, your pay history can stay on a credit report for seven years, and that makes it difficult to "fix" bad credit. You can, however, minimize the damage:
- Pay your bills on time every month. Employers are concerned about your integrity and ability to take care of your own finances. No employer wants to risk being a source of temptation.
- Keep in touch with creditors if problems exist. Creditors are less likely to put bad marks on your record if you appear willing to act in good faith.
- Pull a copy of your credit report at least once a year to make sure the information is correct. If there is incorrect or obsolete information on the report, you can dispute it and have the repository reinvestigate your history. The three main credit bureaus are Equifax (800-685-1111), Experian (800-682-7654) and Trans Union (316-636-6100).
- If you can't resolve your financial and credit issues yourself, the Federal Trade Commission recommends seeking help from non-profit counseling programs or from CCCS, which has more than 800 local offices throughout the USA.
?
Liz Schmid [e-mail] is a freelance writer based in Washington DC.
