When potential employers conduct credit checks as part of their standard pre-employment checks or identity verification process, they aren’t interested in your credit score. Employers look at a modified credit report that outlines your debt and payment history in basic terms only and they are really only looking for the biggest red flags against you. It’s nothing to be fearful of, as long as you understand the process and what information can be accessed.

Why Do Employers Check Your Credit Report?

Employers, especially those in the financial services sector, may review your credit history to identify potential issues that could affect your suitability for a position. These issues may include:

• Frequent late payments, which could suggest disorganisation or a lack of financial responsibility.
• Dependence on high levels of credit or excessive debt, which could indicate financial distress, potentially increasing the risk of theft or fraud.
• Evidence of mishandling personal finances, which might make you ill-suited for roles involving company funds or consumer data.

What Information Do Employers See

Employers receive a modified version of your credit report, which includes your personal details such as your full name and address, details about your current credit accounts and how much credit you have available to you in total. They will also be able to see whether you have ever been listed as bankrupt, and whether you have any defaults or county court judgements against you.

Employers will not see your credit score, or any account numbers for loans or other credit which you may have. The credit report does not contain any information about your income, medical history, or employer, or about your ethnicity or marital status.

Effect on Credit Score

Many applicants worry that going through pre-employment checks with several potential employers at the same time could have a negative effect on their credit score. This is not the case as the search is classed as a soft inquiry, which does not negatively affect your credit score as a firm application for credit might. These inquiries will not appear on your credit report, so employers will not know if other employers are looking at your credit report too.

Legal Rights for Applicants

Employers must notify you if they want to check your credit report and obtain your written permission, which could be signing a form in person or online. It is also good practice for employers to set out all the pre-employment checks they will be running and tell you whether they are doing these checks themselves or using a third-party provider to help.

It’s tempting to assume that you have been turned down for a position because of something on your credit report but this might not be the whole story. Employers will look at a wide range of factors including your qualifications, any criminal record or performance at interview when making their decision. Depending on the job, the credit report may be seen as just a minor factor in their decision.