What to Know About Employer Credit Checks

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Know what’s on your credit report before you apply for a job.

Did you know that errors on your credit report could cost you a job?

According to HR.com, 16% of companies run a credit check on all candidates, and just under a third do so for some candidates.[1] Despite the fact that credit reports were never intended to be a gauge of job performance potential, employers use credit checks as an indicator of how someone handles their responsibilities. What’s troubling about this is that a Consumer Reports analysis shows a third of Americans in their study found at least one error in their credit report.[2]

These days, in addition to polishing your resume and LinkedIn profile, preparing for the interview, and lining up references, you need to check your credit report when seeking a new job. If you find errors on your credit report, take steps to correct them before you submit an application—here’s how.

What employers look for
In addition to getting a glimpse into how folks handle personal responsibilities, employers check credit reports to see if prospective employees are in financial distress. This is especially important for financial roles and positions that require handling money.

What do employers see and does their check hurt your credit score?
When employers check credit reports they do what’s called a “soft” inquiry. That means the inquiry won’t be visible to other parties and will not affect your credit score.

Here are the types of things employers can see:

  • outstanding balances on loans (home/auto/student) and credit cards
  • late or missed payments
  • foreclosures
  • bankruptcies
  • accounts in collections

Move beyond financial mishaps
If there are negative factors on your credit report that might jeopardize your job opportunities, credit counseling from GreenPath Financial Management can help improve your credit. This free service is available to all Consumers members. Learn more.

Consumers provides banking services for more than 100,000 members. If you have banking questions, call us at 800-991-2221. We make it easy to bank how you want, when you want.

Federally insured by NCUA

[1] HR.com. How Human Resource Professionals View the Use and Effectiveness of Background Screening Methods. 2018.

[1] Gill, Lisa. More than a Third of Volunteers in a Consumer Reports Study Found Errors in Their Credit Reports. June 10, 2021

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