Credit Report Access

• Certain employers require applicants to submit to a background check when they apply for a position with the company. A background check is not merely an evaluation of your past criminal history; it involves your credit history as well. The Fair Credit Reporting Act establishes who has permission to access your credit records. As long as a potential employer notifies you that a credit check is part of the hiring process and obtains your written permission, the employer can legally access your credit records.
  
  

Credit Impact

• When employers pull your credit history, they do so to evaluate the level of debt you carry and whether you have demonstrated responsible money management skills in the past. They do not review your credit records to offer you a loan, line of credit or any other additional debt. Because of this, employers can conduct a "soft pull" when evaluating your credit file. Unlike the "hard pulls" performed by banks and credit card companies, soft pulls do not adversely impact your credit score and are not visible to other creditors. Thus, you can safely permit multiple potential employers to pull and review your credit records without putting your credit rating in danger.
  
  

Reasons for Checking Credit

• Not all employers request applicants' credit histories during the hiring process. However, if a position requires an individual to maintain a high level of responsibility or involves handling large amounts of money, a potential employer is more likely to review each applicant's credit before making a hiring decision. Like lenders, employers check credit to protect themselves from financial losses. For example, a potential employer does not want to place someone with numerous delinquent debts in a position that requires him to frequently handle money, as his debts may increase his temptation to steal.
  
  

Potential Problems

• For job seekers, a potential employer's desire to conduct a credit check may pose a problem -- especially if an individual has been unemployed and unable to keep up with her bills. Paying bills late and letting accounts fall into default damages your credit rating and can prevent you from being offered the job you want. Unfortunately, without any income coming in, you are more likely to suffer the financial problems that lead to damaged credit.