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If you are one of the millions of people currently seeking employment, you have likely spent countless hours perfecting your resume, researching perspective employers, preparing for interviews and making sure you look professional—all as a means to give you a competitive edge to secure the job offer.

But have you also checked your credit report to make sure your credit information is being reported accurately?

You may be asking yourself what in the heck your credit history has to do with being considered for a job.  If so, you are not alone, as a lot of people are surprised to know that many companies access your credit report as a standard part of their evaluation process for new hires.

Historically, accessing and reviewing a prospective employee’s credit reports has been a relatively common practice for positions where the employee would be responsible for finances, handling money or have access to very sensitive information or materials. The argument for this screening practice is that how a consumer handles his or her personal credit obligations can serve as a general indication of their financial integrity.  For example, a casino would probably feel more comfortable knowing that the employees handling the large volume of funds or cash have clean credit histories.  Increasingly, other industries are now making the review of an applicant’s or new hire’s credit reports a mandatory step in the HR process.

[Article: Dealing with Debt While Unemployed]

And yes, it is perfectly legal.  Federal law allows employers to view your credit report for employment purposes such as hiring and promoting—as long as the employer has obtained written permission from the consumer.  This consent language is usually provided in the formal job application you complete and sign when you get to the interview stage with a prospective employer.

According to Experian, the employment credit report includes much of the information about your loans and credit cards that is listed in your credit report. To protect your financial security and meet Equal Employment Opportunity laws, Experian employment credit reports omit your account numbers, year of birth and references to your spouse.

Your credit score is not provided to the employer when a credit report is associated with an employment screen.  In addition, the inquiry associated with an employment screen credit bureau pull will not be visible to lenders or other entities that pull your credit report in the future and they have no negative impact on your credit score (they are ignored by the scoring model).

You can certainly ask the company how they will use the credit report and what “red flags” they are looking for.  While they may not share specifics, federal law requires the company to give the consumer a copy of the report along with a written description of the consumer’s rights if the credit report plays any part in a decision that negatively impacts the consumer.

It is very unlikely an employer would make a hiring decision based on a credit report alone.  It is usually leveraged as an additional data element that is considered along with other information such as your work experience, educational background, references, etc., when making a hiring decision.

Given the extremely tight job market, don’t take a chance that your credit information could be the factor that prevents you from getting that perfect job.

[Resource: Get your free Credit Report Card]

Image: hebedesign, via Flickr.com

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