Editorial Policy

What's a potential employer looking for in a credit check?

Erica Sandberg

September 9, 2014

QHi Erica,

I am on my third and hopefully final interview for a job as a receptionist for a clothing and accessories company that just opened up. The manager said they would be checking my credit and for me to sign off on it. I have a credit card with a pretty low balance, just $600. Should I pay it off now? I'm broke, but if it means I'll get the job, I probably can do it. I'm scared. I want this job! Should I say no? If I do say no, can they not hire me? –Jewel

ADear Jewel,

Stop fretting this instant! You are more than fine. Trust me. Since you've gotten this far in the interview process, chances are they want you to join their team. Now they're conducting due diligence. As long as your credit report isn't indicating the types of problems that could make you seem like a risk, you are OK.Ask Erica

Owing less than a thousand dollars, especially if the account is in good standing, will not scare any company away. Besides, even if you were to pay it off, evidence of the newly zero balance would not show up on your credit report immediately — and probably not in time for them to see it.

So what might trouble an employer? Employers become concerned when your financial obligations are so overwhelming that it appears you're irresponsible with money. This would be a serious problem if the job duties include having access to payroll, accounting or anything else pertaining to the organization's fiscal dealings. Other issues that would cause a hiring manager to worry include a lot of collection accounts or judgments. In short, they would not want to hire someone who is desperate enough to steal.

Sign the paperwork enabling the company to pull your credit report. It is not against the law to deny access, but if checking that report is part of the hiring process, it is legal for them to choose not to go any further.

In cases where people do have a report filled with negative issues, I strongly suggest instigating a conversation with the manager first. That way the applicant would have the chance to explain what happened. A credit report doesn't show where all the money was spent, nor why accounts went into default or to collection agencies. If the debts were for such understandable reasons as medical bills or extended unemployment, you could get a break.

What I would like you to do is jump online immediately, log into AnnualCreditReport.com, and view your consumer credit reports for the three major credit bureaus to make sure nothing is appearing that shouldn't. It is not unusual for these reports to contain mistakes, and you don't want to have a “What the heck is this?!” moment right before your next interview. If you do spot errors or evidence of fraud, dispute it, but if you can't clear it up in time, prepare to discuss the situation.

I admire that you are ready and willing to delete this debt so you can secure this job. That's the attitude you should convey to any employer. I highly doubt that the person you've been dealing with will utter a single word about the account in question, but in the event he does, make this pledge: “I want this position, and if it means paying this balance off, I'll do it right here, right now.”

Good luck getting this and all other jobs you may want in the future!

Got a question for Erica? Send her an email.