How Your Credit History Affects Employment
By Mark Swartz
Monster Contributing Writer
Surely you’ve never missed a utility bill payment. Or maxed out your credit card during a really rough month. Because if you have, an employer may discover this when you apply for a job or promotion.
Will it determine if you don’t get hired or are passed over for advancement? Depends on the industry, employer, and how bad your credit history is.
It may seem odd – even unfair – that your loans and charge card us can be viewed by employers as part of a background check. But that’s the way it is in Canada. You’d best be familiar with your credit reports so there are no surprises.
Can An Employer Really Get Hold Of My Credit History?
You bet they can. Anytime you apply for a job, the employer can have you sign a release that permits them to pull your credit reports at will.
In Canada this information comes mainly from two suppliers. One of these is Equifax. TransUnion is the other. Each provides an extensive payment record of anyone who’s ever applied for credit. That includes more than 21 million of us.
What Do My Credit Reports Reveal?
Mostly a list of your loans, mortgages and credit card accounts. So if you’d plunked down $1,000 last year on your Victoria’s Secret charge account, it will appear on your credit report. However details of each item you purchased via credit card are not available to the reporting agencies or employers. (Phew!)
Also disclosed are any missed payments, delinquencies, bankruptcies or consumer proposals, judgments against you, or liens on your property. Information that’s collected can stay on your record for six years or more.
Which Jobs Are Most Likely To Ask For A Credit History
The trend in Canada is that more employers are doing a credit check for employment. This is the opposite of the U.S., where states are passing laws for added privacy.
Expect a credit check if you work in the financial sector. Banking, insurance, accounting...when money is involved, your financial viability is almost sure to be scrutinized. If you have a position with a “fiduciary duty” in any type of firm, how you handle your own money could be important.
Recently the federal government introduced mandatory checks for all public servants. Spokeswoman Lisa Murphy said; “This practice is common in certain private industries to indicate excessive indebtedness that may increase temptation to commit unethical acts.”
How Do Employers Use My Credit Information?
There’s generally no sinister intent here. Employers may just want to confirm that you are who you claim to be. Checking your employment and address history is their primary concern.
Any information used should pertain directly to the job requirements. That’s not always the case though. You could get knocked out of contention if your record is full of missed payments, a bankruptcy, or multiple judgments against you.
Can I Make Sure My History Is Accurate?
The credit agencies aren’t perfect. With millions of records to manage there are bound to be mistakes. Keep your history correct by doing a credit history check on yourself.
You can do so for free by contacting each agency. Either by phone or online, request a copy of your personal credit report. They’re obligated to mail you a copy once a year if you ask. For an immediate view online of your record there’s a small fee.
Is There A Way To Tell Employers Why My Credit Is Bumpy?
Some recruiters say that honesty is the best policy: admit at the interview that you’ve had credit problems. Explain them in a way that shows they were temporary, specific to a challenging period in your past, and that you’ve since worked hard to ensure a clean history.
Other recruiters advise not to say a thing unless confronted. Some employers that check credit may gloss over the findings.
In any event, be sure that you know beforehand what’s on your credit history. That way you’ll avoid being blindsided by something innocent like a few late payments.