That is right more and more employers are checking credit reports as a screening technique for hiring.  The most common scenario you might hear to why this is allowed is a position which you are directly handling cash transactions.  Since your credit report is an indication of how you do handling money in personal life, the company wants to know how you do on your own  so they can guess how you will handle theirs.

Beyond the handling of cash, your credit report is an indicator of the overall risk you represent.  It is seen more as a measure of your responsibility.  If you are completely irresponsible it will show on your credit report and the company is more than likely going to avoid you.

OK, this puts those consumers looking to rebuild in a tough place.  They might a default or maybe even a bankruptcy on thier record and this is going to haunted them when they are looking for a job.

Your Credit Score and Employment

Now, don’t be confused and this happens all the time; Employers check your credit report not your credit score.  First, this isn’t something they do behind your back.  They must have your written permission and you will know.  Also, when they request your credit report from the credit bureaus, the copy they get is what as known as an employment report.  It is taylored to employers and will not include your credit score.

How to Prepare for Your Interview

Well, I am not giving interview tips, but you should check your credit report before you start scheduling interviews.  This helps in two ways.  First, you will know where you stand before you even get started.  Second, you have a little time to dispute any possible errors on your credit report.  This process is not that difficult and may act as a clean up of your credit report if there is a lot of errors.

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The rules that are followed here are laid out by the Fair Credit Reporting Act.  It states employers do have the right to review your credit report as a form of a background check.  This does not happen without you knowing though.  The employer must receive your written permission before they can access your credit report and this will included the employee signing off on it.

When an employer has your permission they then will request your credit report from one or all of the three major credit bureaus.  What they get from them is what is known as an “employment report.”  This is report includes all the same information as a normal credit report, but it will not include your credit score.

So when you applying for a job and you are concern about your credit standing you should check your credit report.   Even though this is what really matters to the employer it would hurt to review your credit score when you are doing so.  Also, if you are concern it is not the cleanest report and could be a potential problem, you have a few options.  First would be to dispute credit report errors.  This will be one of the quickest ways to improve your credit standing.  Other methods could take some time, but paying your bills on time is one of the biggest.

If you are wanting to check out how you stand visit MyFICO to get your Fico Scores/Reports.  This is the best place to get both.

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So what happens if you want to shop around?  This is actually taken into consideration.  By the way, shopping around is actually the sign of a frugal and responsible consumer.  You actually are granted a shopping period, but this only applies to large and important loans like mortgages and auto loans.  You will not be grant such leniency when applying for credit cards.  These are not important loans and will be count every time you apply.

The term to define applications for credit is inquiries. It is better put as a viewing of your credit report and there are two different ones

• Hard Inquires – These are used when applying for credit.
• Soft Inquires – These are usually seen as everything else.  When you check your credit report.  When an employer or insurance company checks your credit report.  When a creditor checks in the effort to offer you credit.  (You know the ones, all those credit card offers you get in the mail)

An important Point : Only Hard Inquiries will count against your credit report.  All others will not matter.

Your credit score considers the following :

• How many applications for credit have you had recently?
• How many new accounts have you opened?
• When was the last time you applied for credit or opened an account?

The important thing to remember is shopping around will not hurt your credit score as looking like several inquiries in a short period of time, if the loan is for a house or car.  Get you shopping for this type of loan done in the grace period allowed.  And don’t go apply for 10 new credit cards next month.  This will hurt your score tremendiously.  It is OK to check your credit report.  It doesn’t count as a hard inquiry.  Review your inquires to see if they sound right and dispute the one you believe to be wrong.  Maybe you will get a little boost to your credit score.

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