EmployeeScreenIQ

If you're an employer conducting a background check, or an employee applying for jobs, you should know that a candidate's credit report is often an important part of the process.

Background checks often include copies of the applicant's credit reports. Three major credit reporting agencies - Experian, TransUnion and Equifax - provide a modified version of the credit report called an employment report. An employment report includes information about a candidate's credit payment history and other credit habits, according to an article by Privacy Rights Clearinghouse.

An employment report usually offers the same information as a credit report, only it doesn't include your credit score or date of birth. It also does not require an inquiry of your credit file, which is good since having too many credit inquiries can actually lower your credit score.

Credit reports also can include other information, such as your former address and previous employers. A potential employer can use this information as a way to verify the information a candidate gives them on an application or resume.

Many job seekers wonder why their personal credit information is even available to employers, let alone pertinent to the job search. In most cases, it's not as though an employer is looking for judge a candidate solely based on their good or bad credit habits. However, whether you have good or bad credit habits may say something about your character and level of responsibility.

"Often employers use your credit history to gauge your level of responsibility," the article notes. "Whether a valid assumption or not, some employers believe if you are not reliable in paying your bills, then you will not be a reliable employee. Unfortunately, a bad credit report can work against you in your search for employment."

There are some people who don't have any credit whatsoever, which can also come back to haunt you during a job search as well, particularly if the potential employer feels the ability to pay bills on time and maintain good credit is a sign of responsibility. Since background checks today are imminent, candidates might as well build up their credit to the best of their ability.

Labels: Background checks