THE BLOG
11/20/2012 11:15 am ET

Your Employer Is Pulling Your Credit! Are You Ready?

A young client sat across from my desk, somewhat started. He had just graduated from college and admitted that, during college, he had not been careful with his money. It's a familiar story: As a result of credit card mismanagement, he was climbing out of debt.

Now that he had graduated and was looking for a job (to start his adult life PLUS to pay off student loans PLUS to pay off his debt) he learned that employers were pulling credit reports of their employees.

This practice is sometimes thought to be an invasion of privacy and although I don't love the idea of it myself, I completely understand why employers do it:

• Some do it because they are entrusting people they don't know with expensive assets; they want to know of any red flags that they should be concerned about prior to granting employment. I think this will be especially true if you work with money or other expensive assets.

• Others pull credit reports of their employees regularly because those jobs are highly sensitive and the employers want to ensure that their employees aren't in debt and potentially tempted by bribery.

• I suspect that some are pulling credit scores to confirm information provided on resumes or to ensure that they're not hiring someone with a habit of moving to a new city every 3 months.

So whether you approve of the practice or disapprove, the reality is that employers are pulling credit reports and they might pull yours. Does this mean you won't get a job if you have filed for bankruptcy? Does this mean that you might lose the job you have because you spent more than you should have on that Vegas vacation?

Well, each employer will have their own thresholds of what they consider acceptable and unacceptable but here's what I think: I believe they are less concerned with specific credit scores than they are with credit history. Remember, they're not necessarily looking for a specific score like a lender would. Rather, they want to get a third party viewpoint on how stable and consistent and mature you are... and they're using your credit report as a way to get that picture.

With that in mind, it becomes even more important to pull your credit regularly and work on improving it, and make sure that the information is accurate!

And with the recent graduate who sat in my office, that's exactly what we did. We pulled his credit reports, disputed (and eliminated) some errors, and put together a plan for him to get his debt under control by paying his amounts due on time each month because he was paying them over 30 days late.

As of this writing, his credit is in much better shape and he's applying to jobs with confidence, knowing that it will only get better with time.

If you are job-hunting now or thinking about looking for a job next year, or if you are in a job that pulls credit reports, do your career a favor and take some time to look at your credit reports right now.

Please email me your credit concerns questions@jeannekelly.net

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