How Can Your Employer Use Your Credit Report?

When applying for a job, applicants sometimes fear their potential employer checking their credit report and not hiring if they don’t like what they see. When companies request to see your credit history when you apply for a job, it helps reduce their risk. Employers turn a wary eye towards applicants who have financial problems like always making late payments. However, when checking your credit report there are things employers can and cannot legally do.

Employers See a Limited Report

When you apply for a job, employers may ask to view your credit report. Access to your credit report is governed by the Fair Credit Reporting Act (FCRA), which sets the limitations on when and by whom your credit information can be accessed. The FCRA has set strict restrictions on you can see your credit information, especially on employers who use credit reports to screen new job applicants.

When your information is requested by a potential employer, credit bureaus will send over a limited credit report. Your employer cannot see your:

• Birth year
• Account numbers
• Credit score

Remember that your credit report and your credit score aren’t the same thing! When you hear that employers check your credit score when screening applicants, rest assured that it isn’t true.

Employers Must Get Your Permission

FCRA guarantees that your credit report cannot be used against you and your potential employer must get your permission before getting your credit report. No credit bureau will give your report to an employer if they do not have your written permission.

If a company decides not to hire your because of your credit report, they must give you notice and allow you to respond and explain why it won’t affect your ability to do the job. You can be informed either:

• Orally
• Electronically
• In writing

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The above information is for educational purposes only. All information, loan programs and interest rates are subject to change without notice. All loans subject to underwriter approval. Terms and conditions apply. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.