Employer credit report request riles student
By Erica Sandberg
June 9, 2015
I am 18, just graduated and looking for a job before college starts. I've never had credit. Employers want to see my credit reports. What am I supposed to do? If I never had credit before, is this going to stop me from being hired and why? Is this discrimination? –Tia
Hold on to your mortarboard, because what I'm about to say may blow your mind: Employers are allowed to be discriminating — or, more accurately, discerning. No, they can't deny you a job based on your sex, race or religion, but in most states, employers can take a look at your credit report to see what kind of borrower you've been. When they do, they're free to judge you and make a determination about your character.
Because you do not have a history of using credit cards or taking out loans, you likely don't have a credit report. Then again, you don't have a negative record either, and that's great. Presuming that you haven't had other problems that would land on a credit report — unpaid parking tickets, for example — a credit report with your name on it has not yet been created.
To be sure, check for free at AnnualCreditReport.com. Each of the major credit reporting agencies in the U.S. — TransUnion, Equifax and Experian — collect data on credit-active consumers. If creditors have not reported anything about you, no report will come up. However, if reports have been generated, it may be due to fraud or errors.
If you see any accounts that are not yours, dispute them with the credit reporting agencies right away. There's an option to do this online at each of the agencies' websites, but it's better to write to them instead for legal reasons. Here are the mailing addresses for disputing errors with TransUnion, Equifax and Experian. Include a copy of the report with the incorrect item clearly marked, and explain why the data is wrong and that you want it removed. Send the package certified mail. Investigations take about 30 days, but in the meantime it will be marked as “in dispute” and won't be held against you.
Presuming that you don't have anything — correct or incorrect — showing up, the employer will have nothing to read. Will being a mystery woman be a detriment? Probably not. Most employers recognize that your age has prevented you from becoming a credit customer. Besides, most are just looking for evidence of financial troubles. If a report shows that you owe considerable debts, or have consistently made payments late, you could be passed over for the job. The employer might view you as a risk, especially if the position involves handling money.
Good news, though: They've asked for permission to pull your report. That usually means they're interested in hiring you! If they weren't, the person who interviewed you would simply toss your resume in the circular file and move on to the next candidate.
They want to confirm that you're trustworthy, so be upfront. Tell them you're more than happy to have them check your file (they'll provide a form for you to fill out), but as you haven't had a credit card, they won't see much. Would personal references do? Be prepared to wow them with statements from teachers, coaches and any other reputable person who can vouch for your responsible nature.
If you do have a credit file and if there is anything negative or inaccurate on it, explain your case. Employers are sometimes willing to consider lessons learned when making a decision.
If you want to start building a credit history after getting the job — and I strongly suggest you do — pursue a secured credit card that's in your name only. In exchange for a few hundred dollars put down as collateral, the issuer will grant you a card with a small credit line. Just be sure to check with the card issuer that it submits payment history to the credit bureaus, or you won't be building your credit.
As soon as you get the card, charge — but repay the balance in full and always before the due date. That information will show up on your reports. The more times you do this, the greater your reports will look. The other option is to ask a credit-worthy adult to add you to his or her account as an authorized user.
Another reason to be happy: The objective nature of the credit approval and rating process. Your actions count for everything. Now, it's time to show the world how reliable you really are.
Got a question for Erica? Send her an email.