Does an Employer Receive Your Credit Report or Credit Score?

Employers cannot check credit reports or obtain credit scores without written authorization from the employee. However, authorization is usually granted during the hiring process and in most states allows the company to continue making periodic credit checks without further permission. Some companies use information on credit reports to gauge an employee's level of responsibility as the employee is being considered for key promotions.

Credit Scores

Poor credit scores can hinder a job search, although not all companies check credit records. Credit scores are three-digit numbers ranging from 350 to 850. Scores of 720 or higher represent excellent credit. Scores below 620 indicate credit problems such as excessive debt or late payments on several accounts. Companies checking credit reports may focus little on scores and instead scan the report for major negative information such as court judgments or bankruptcies.

Considerations

The Fair Credit Reporting Act allows employers to credit information for considering employees for transfers, retention and promotions. Some companies may conduct periodic credit checks to identify employees with high debt-to-salary ratios, according to Privacy Rights Clearinghouse. Some employers may assume that employees with excessive debt or financial problems may be more prone to theft than other employees.

Discretion

Generally, employers conduct credit checks only for new hires or current employees being considered for key positions in sensitive roles handling money or budgets. Some states have specific laws prohibiting employers or potential employers from conducting credit checks unless there is a reasonable connection to credit backgrounds and the type of job being considered. Police officers susceptible to being offered bribes are likely to receive regular credit checks, but there may be little need to periodically review the credit report of an elementary school teacher, for example.

Preparation

Prospective or current employees concerned about background checks should examine their credit reports periodically. Credit reports are available for free through AnnualCreditReport.com, a website endorsed by the Federal Trade Commission. Visit the website to order a credit report and then follow instructions on the report to order a credit score separately, for a fee.

Disclosure

Employees not hired because of information on their credit report must be told so by the employer, according to the Federal Trade Commission. The disclosure is similar to notices credit card companies and other creditors send when turning down requests for credit. Most employers get around this requirement by not stating any reason for not hiring a candidate. Typically, employers provide only generic feedback for candidates not selected for a position, with many companies offering no information at all.