Employers commonly run credit checks to ensure a candidate has the financial integrity and responsibility to perform well. This means that a candidate must be able to handle money responsibly, such as keeping agreements with creditors by paying them back on time. This is especially important for management jobs with responsibilities that involve taking large amounts of cash.
Credit Report
Credit reports are a record of your financial history. They include information about the types of credit accounts you’ve had, your payment history, and certain other information. Your creditors typically provide this information to the three nationwide consumer reporting agencies. A credit report helps lenders determine whether to give you a loan or approve a credit card application. They also help lenders determine the interest rate they’ll charge. Likewise, employers run a credit check for employment and consider credit reports when making employment decisions. They may examine a candidate’s payment history and whether they’ve filed for bankruptcy or been sued. Generally, however, credit reports aren’t used to discriminate against job applicants. And in some states, using credit information is prohibited by law.
Credit Score
Credit scores are one of the many tools lenders use to assess how well you manage your financial obligations. They help them decide whether to offer you a mortgage, car loan, business account, or insurance policy. Typically, the higher your score, the better the chances you’ll be approved for credit products with lower interest rates. However, a low score can mean you pay higher interest on loans and credit cards than you should. Your credit score is a three-digit number that reflects the health of your credit history. It’s calculated by looking at several different categories on your report. You can access your credit report for free from all three major bureaus once a year at your request. Then, you can review the details and take steps to improve your score if necessary.
Credit History
Your credit history records how you use credit and how responsible you are at managing it. It helps lenders decide if you will make timely payments on loans and credit cards. It also tells lenders if you have a history of being late on payments or have had accounts sent to collections. These actions could negatively affect your credit scores, and the negative information stays on your report for up to seven years. Even a single late payment can hurt your credit scores, so be sure to pay your obligations on time every month. Good credit history is often a factor in hiring decisions, so keeping your records clean and paying bills on time is essential. However, some states prohibit employers from checking your credit for employment reasons.
Credit Report Score
Your credit report is a collection of information about your finances. It includes details about your loans, credit cards, and credit inquiries. Your credit report also shows how you’ve been paying your bills. Having adverse payment history can hurt your credit score. The negative information may include late payments, charge-offs, repossessions, and bankruptcies. Paying your bills on time is the most important thing you can do to protect your credit. You can do this by setting up automatic payments or scheduling a reminder on your calendar to make your monthly payments. Other important factors that influence your credit are how much you owe and how many accounts you have. Financial experts recommend keeping your credit utilization under 30 percent.
