Here’s What to Do Before a Hiring Manager Checks Your Credit

fhideIf you’re interviewing for a job, and the hiring manager asks for your consent to do a credit check, don’t panic.

For the most part, employers run credit checks on job candidates who will be handling sensitive information or money. The idea is to make sure you’re, well, good at handling money. They want to mitigate the risk of hiring someone who has a motive to commit fraud or embezzlement.

They won’t see your credit score or your account numbers, but they will see your payment history, your account balances and the amount of open credit you have, which could potentially raise red flags for employers.

And although the chance of having an employer check your credit is fairly low, there are some things you can do to make sure you’re in the best possible position in case this happens to you.

What You Can Do Before The Hiring Manager Even Asks

When it comes to your credit, it’s important to stay organized and keep tabs on your credit report. But if you’re looking for a job, this could be especially important.

So before the hiring manager has a chance to even ask to run a credit check, use a free website like Credit Sesame to review your report to see if there are any inaccuracies and dispute them with the credit bureaus right away. (One in five credit reports have an error!)

If there are accurate dings, like high credit utilization rates and late payments (the two biggest factors in your score and what employers are looking at), do what you can to pay your accounts down and negotiate with the companies that dinged you.

Credit Sesame will even give you personalized tips on ways to clean up your credit report and improve your score.

Best yet: It’s free and only takes about 90 seconds to sign up.

After The Hiring Manager Asks for Consent to Pull Your Report

If you already know what your credit report shows, you’ll be able to get ahead of anything the hiring manager might see as a red flag.

Be honest and talk to them about any disputes you’re currently working on. Let them know if your credit troubles are due to a hardship, like a divorce or layoff — though be careful about offering up too much information.

“The proactive approach is best,” says Robin Hartill, a certified financial planner and writer at The Penny Hoarder. “You’ll be in a better position to make your case if you can explain how you’re working to fix things and why your previous mishaps won’t affect your job performance.”

Next Steps…

If you get the job, congrats!

But if the company decides not to hire you because of what it found on your credit report, it’s required under the Fair Credit Reporting Act to let you know. You should also give you a copy of the report, a summary of your rights and the chance to dispute the decision.

Employed or not, what you should do next is continue to monitor your credit report. Work on improving your score with Credit Sesame so you can avoid any issues in the future.