Will I Be Denied a Job Because of My Credit Score?

by Michael Keenan
Not paying your credit cards on time can hurt your job application.

Technically, your credit score can't be the reason you didn't get hired for a job because potential employers aren't allowed to request your score. However, that's mostly just a matter of semantics. In most states, employer can request a copy of your credit report, which contains all the information used to calculate your credit score, as long as you give permission for them to do so.

Application Process

As part of your job application, you may be asked to give the employer permission to check your credit report as part of the background check. Without that permission, an employer can't access it. However, many applicants feel as if they don't have a choice but to say yes, because the employer otherwise could remove them from the pool of candidates for being secretive. Therefore, it's generally best to be upfront about what's on your report, especially if you have a good reason for any negative entries. For example, if you had to declare bankruptcy because you paid your mother's emergency medical bills, that might allay a potential employer's concern that the negative credit report suggests you're irresponsible.

Limited Protection in Some States

According to Employment Screening Resources, as of November 2013, California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont and Washington had laws restricting employers' abilities to check your credit report as part of a job application. However, there are exceptions that vary from state to state, such as permitting employers to check for jobs with managerial responsibilities or money-handling duties. In addition, as of early 2014, a federal law has been proposed that would prohibit private employers from checking credit reports as part of the job application process.

Checking Report Proactively

If you don't already check your credit report regularly, do so before applying for jobs. You're entitled to a free copy of your credit report once per year from each of the three major credit reporting bureaus: TransUnion, Equifax and Experian. When you receive your report, go over it with a fine-toothed comb to make sure it's all accurate. If you find accounts reported inaccurately, or ones that aren't yours to begin with, dispute them with the credit bureau so the incorrect information won't affect your job prospects.

Updating for Errors

If your credit report is part of the reason you weren't hired, federal law entitles you to know about it. If you dispute some of the information on your credit report and your dispute is upheld, you have the right to request the credit bureau send corrected credit reports to anyone who has requested your credit report in connection with employment in the past two years.

About the Author

Mark Kennan is a writer based in the Kansas City area, specializing in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."

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