Job Application and Credit Score
When you apply for a job, it’s not uncommon for employers to request a credit or background check. This is especially true with jobs that require you to work with money or sensitive financial/security information. And considering the important role credit plays in our society, much less our individual financial lives, worrying about the impact of inquires on your credit score is completely understandable. In this case, however, you can rest a little easier because credit checks for employment screening purposes won’t impact your credit score in any way whatsoever. When it comes to your credit score, it’s the type of inquiry that matters.
Credit checks for employment purposes are considered “soft” inquiries, which are ignored in your credit score calculation. Hard inquiries, those that are a result of an application for credit or other type of service (phone, utility, cable, etc.), show that you are actively searching for credit. These are the inquiries you need to worry about, they’re the ones that count. (In fact, the only person who can see soft inquiries is you, when you access or pull your own credit reports.) Too many inquiries in a short period of time will negatively impact your score. But the good news is that inquiries — while reported in your credit reports for two years — only count towards your credit score for the first 12 months.Checking your credit report for employment purposes has no impact on your creditworthiness and does not affect credit scores at all.
When an employer checks your credit history, an inquiry is added. But, that inquiry will only appear on your personal credit report. That inquiry will not appear on reports given to anyone else, including lenders or other potential employers. Because it is not given to anyone but you, it will not impact your credit scores in any way.
Credit reports provided for employment purposes also contain less information than reports used for lending. Employment reports exclude any information that would be in violation of the Equal Employment Opportunity Act (EEOA).
What's not in your credit score
Your credit rating company does not consider:
- Your race, color, religion, national origin, sex and marital status.
US law prohibits credit scoring from considering these facts, as well as any receipt of public assistance, or the exercise of any consumer right under the Consumer Credit Protection Act.
- Your age.
Other types of scores may consider your age, but FICO Scores don't.
- Your salary, occupation, title, employer, date employed or employment history.
Lenders may consider this information, however, as may other types of scores.
- Where you live.
- Any interest rate being charged on a particular credit card or other account.
- Any items reported as child/family support obligations.
- Certain types of inquiries (requests for your credit report).
Your scores do not count “consumer-initiated” inquiries – requests you have made for your credit report, in order to check it. They also do not count “promotional inquiries” – requests made by lenders in order to make you a “pre-approved” credit offer – or “administrative inquiries” – requests made by lenders to review your account with them. Requests that are marked as coming from employers are not counted either.
- Any information not found in your credit report.
- Any information that is not proven to be predictive of future credit performance.
- Whether or not you are participating in a credit counseling of any kind.