We are receiving a lot of inquiries on how to raise credit score when you’re employed.
A lot of us experience times when we are being laid off work or stop working due to many personal reasons. Whether or not you are employed for a long time or you have been on hiatus for a short period of time and you are trying to apply for a loan or going back to work, your credit score will be checked.
Does credit history affect employment?
Yes and no. No, because credit bureaus do not share your credit score with your employer. However, they can ask for a credit report. Both are good to go if you know how to raise your credit score before they check-in.
But first, why do employers check your credit report?
The reason why an employer wants to check an applicant’s credit history is that someone’s credit score can flag potential problems in the workplace. Check the following for the possible problems an employer wanted to avoid.
- A credit history with lots of late payments means you’re not organized or responsible to pay your finances/loans on time.
- You might be in financial distress due to too much debt on your account which may be a cause of theft or fraud in your new workplace.
- There are types of jobs that pay attention to your credit history if you have evidence of mishandling your own finances. Because that only means you are a poor fit for a job that you are aiming at as you cannot be responsible enough to take on the responsibility of being mindful of your financial status.
What do employers see when checking your credit?
Even if they are seeing your credit history, the important numbers such as the credit score are not disclosed on their end. They can only see a modified version of your credit report.
The only things that they can see in your report are the amount you owe and your credit balance if you still have any. Information such as marital status, birth date, and account numbers are not visible on the report that they are going to view.
Can credit checking affect your overall credit score?
A lot of people worry if this would hurt their credit score but the answer is no. Since it’s a soft inquiry, there will be no effect on your overall credit score compared to having to check for a credit card application.
How can you prepare for it before your employer starts checking?
Like any other background check, it is better to be ready before you regret something in the end. As a citizen, you are entitled to check your credit report once every 12 months. And since you have access to it, it would be best if you can check the report and see if there’s an error that needs to be fixed before an employer can check it out. We recommend doing it every year and once done, practice the following:
- Always pay your bills on time. Never be late. Being late on payments can hurt your credit score and would definitely show up on your report. It’s like being unable to keep track of your finances and could mean you can do the same with your new work.
- Don’t overuse your credit. It’s your right to use them but we advise that you take it lightly and don’t overuse them. Overusing the available credit means you don’t have sufficient funds which is the reason why you are using ‘available credit’.
Being employed would be a great help in your household but if employers are doing a background check on your financial capability, it is better to practice how to raise credit scores when you’re employed.
In order to do this, you need to be mindful of your annual credit history.
If you are regularly checking it, you would be able to see how you are performing in terms of using your available credit, paying your bills, and managing your overall financial score.
For information about debt collection harassments check our article