If you have made it past the interview process, it is time for the background check. Depending on the position you are in the running for, your future employer may request a credit check.

Why would they care about your credit history? There are numerous reasons why employers may request a copy of your credit bureau files. Here are the most common reasons:

• Are you a responsible person? Credit bureau files allow employers to view the ability of a candidate to handle their own financial affairs. Candidates with many missed payments on file are usually viewed as irresponsible and unorganized.
• Do you have excessive debt or use as much available credit as possible? Employers may see this behaviour as a red flag because it puts them at a higher risk of internal fraud or theft.
• If you are up for a position in which you will be handling company or client money, employers will want to see how you handle your own finances.

Will I be negatively affected?

Whenever you apply for a new credit card, your credit score takes a small hit - if you apply for five credit cards at once, your credit score will definitely take a toll. However, when employers request a copy of your credit history, it counts as a “soft inquiry”. This means that your credit score will remain the same. Employers will not be able to see how many soft inquiries you have on your file.

Next Steps

It is always a good idea to stay on top of your credit. Here are some quick tips to get started:

• Check your credit report and dispute any errors. Major credit bureaus in Canada, Equifax and Transunion have different dispute processes.
• Pay your bills on time! Using your credit and paying on time consistently is a surefire way to build up your credit score over time.
• Monitor your credit report regularly. There are several free websites designed to help people stay on top of their personal finances like Credit Karma or Credit Sesame.