Can a High Credit Card Balance Affect a Background Check?

Some background checks provide access to your credit information, with potential employers or someone else you authorize using the information to determine your ability to handle money. A high balance on a single credit card isn't likely to negatively affect a background check. However, multiple credit cards with high balances could cause problems for someone under consideration for a job requiring sound personal financial management. Certain jobs in banking, finance and insurance require good personal credit management.

Considerations

Employers realize that everyone is susceptible to credit card debt, and it's not an issue for most applicants. Virtually all employers conduct general background checks that include checks for arrests and other criminal history. However, not all employers check credit. Many who do are more concerned about major credit problems such as bankruptcy or court judgments because of debt lawsuits. The employer may also check for bank or wage garnishments and evidence of tax problems.

Credit Reports

People who are concerned about their credit should check their credit reports before authorizing background checks. Some credit reports contain inaccurate information that is easily removed by contacting the credit bureaus by mail, telephone or online. Credit bureaus also allow people to place brief statements on their credit reports. Someone preparing for a background check could enter a statement explaining the reason for a high credit card balance. The prospective employee could explain that the credit card debt was caused by unemployment or divorce, for example. Credit reports are available for free from Annual Credit Report, a website authorized by the Federal Trade Commission to offer free reports under the terms of the Fair Credit Reporting Act.

Company Cards

Although high credit card debt may not affect a background check, it could become an issue after hiring. Some new employees, especially managers, are expected to apply for company credit cards for business travel. The credit card company will require a standard credit check, with the application possibly denied because of the high credit card balance and possibly poor credit score. That could cause significant embarrassment for the new employee.

Additional Scrutiny

Privacy Rights Clearinghouse, a national nonprofit consumer information company, reports that employers usually can continue reviewing credit reports after the employee initially gives consent. That means the company can review credit reports each time an employee is under consideration for a promotion. A high credit card balance that was not an issue when the employee was first hired could cause problems when the employee is being considered for management or some other sensitive position.