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Why Your Credit Matters for Background Checks

Background checks are becoming more common every day. You may need to submit to a background check for everything from getting a new apartment to getting a job. Understanding what these checks cover allows you to find out how you come across before submitting your next application requiring a background check.

Many people assume that background checks only cover criminal charges, but that’s not true. While most checks look for relevant criminal convictions, they also cover other details about your life. For instance, many background checks look into your work history, driving record, and, most importantly, your credit history.

Why does it matter that your credit is included in some background checks? It’s because your credit is something you can change. You can’t retroactively improve your work history or driving record. However, with a bit of work, you may be able to improve your score significantly. Here’s what you need to know about when your credit may be pulled for a background check, why some organizations want it, and how to improve it before your next application.

What Organizations Might Request Your Credit During a Background Check

Most background checks are intended to determine whether you’re a safe and responsible person. That’s why credit is becoming more common to include during these deep dives into your personal history. The way you handle your money can be valuable information for many organizations, including:

  • Housing rental agencies: Landlords take a risk whenever they agree to rent their property to someone. They want to make sure that you’re a trustworthy person before they let you live on their property for the following year. In particular, they want to confirm that you’ll be able to pay your rent monthly. That’s why many landlords check your financial history during routine application background checks; your score and other information lets them know how likely you are to pay.
  • Employers: It may seem odd that an employer wants to know whether you’re good with money before hiring you, but it’s not as strange as you’d think. Many companies will perform credit checks before hiring people for roles involving money. They want to see how well you handle your own finances before bringing you into a position that puts you in charge of theirs.
  • Volunteer organizations: Even volunteer groups may check your credit before accepting you. Again, these groups want to confirm that you can manage your own money before allowing you to control their finances.

Not every job or apartment will require a background and credit check with an application. However, many of the most desirable apartments and employers do. You can make yourself a more appealing applicant by taking the time to fix your report before you undergo your next background check.

Improving Your Credit for Background Checks

Why can you change your credit report when you can’t change your job history or criminal record? It’s because of how the reporting process works. Since reporting agencies need to collect data from a wide variety of sources to generate their profiles on everyone in the country, there’s a significant opportunity for mistakes. Here’s how you can review your report, spot your biggest weaknesses, and start getting rid of errors today.

Request Your Credit Report

Before doing anything else, you need to get a copy of your report from each reporting agency. There are three reporting bureaus that you need to worry about:

  • Equifax
  • Experian
  • TransUnion

Each of these agencies is bound by federal law to give you a free copy of your report annually. You can get your copies through the site for free.

They are also required to give you free reports if you meet certain conditions, such as:

  • Being unemployed and starting to apply for jobs in the next two months
  • Having been denied an opportunity because of negative information on your report
  • Having your identity stolen
  • Having incorrect information on your report

You can reach out to these agencies individually to request your free reports if you meet any of these criteria.

Identify Your Weaknesses

Once you have a copy of your report, you can look through it to understand your current credit status. Your report will include information like:

  • Your personal information, including current and past addresses
  • Your financial accounts, both current and historical
  • The credit limits, balances, payment histories, and creditors of those accounts
  • Times you’ve been sent to collections
  • Unpaid child support
  • Other public records, including bankruptcies, foreclosures, and civil judgments against you

As you read your report, you should pay attention to two things. First, look for issues like small unpaid debts, delinquent accounts, and other genuine problems that you can resolve by making payments or getting in touch with your creditors. Getting these issues under control can help you improve your score, though it may take some time.

Second, look for anything you don’t recognize, including unfamiliar accounts, collections items, or late payments. These are credit errors, and agencies must fix them under the Fair Credit Reporting Act. More importantly, fixing them can quickly improve your report without significant effort on your part.

Fix Credit Errors

Fixing errors is easier than you may think. You need to file a dispute with the agency. Then it is their responsibility to remove the error from your report.

In some cases, reporting agencies may not respond to your dispute. If that occurs, then you should get legal assistance to fix the issue. Experienced credit error attorneys can help you improve your report by forcing agencies to remove these errors for good.

Improve Your Background Check Results By Fixing Credit Errors

Your credit doesn’t just impact your ability to open new cards or get loans. A negative report can prevent you from renting your dream apartment or getting the job you’ve always wanted. That’s why it’s so important to make sure your report is error-free before applying.

If you’re struggling with credit errors, you should get help. The experts at the Law Offices of Todd M. Friedman are ready to help you fix your report and ensure it is error-free. Schedule your consultation today to learn more.