Will Your Credit Score Show Up on a Background Check?
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Your credit score may only be three little numbers, but it packs a powerful punch when it comes to your financial well-being. A low score can drive up your interest rates or even prevent you from qualifying for a loan.
But what about renting an apartment or getting a new job? Does a credit score show up on the background check run by your potential landlord or employer?
The short answer is no, your credit score doesn’t usually show up on a standard background check — though sometimes landlords may submit a request for a credit score separately. (You’ll have to give your written permission for them to do so.) But your credit history could still affect your application.
Here’s what you need to know.
What is a background check, and why is it done?
A background check is a screening that reveals relevant parts of your personal, financial and criminal history. These reports are usually ordered by landlords and employers, who assume the risk of trusting property or information to somebody they don’t know.
By running a background check, the screener has a chance to see elements of your history that may signal disorganization, carelessness or even criminal tendencies. Thus, a background check helps others make a more informed decision about whether to approve your application for a job or a lease.
What’s on your background check — and what isn’t?
While the specific items detailed on your background check vary both by state and by which investigative firm your screener chooses, most reveal criminal history, driving records and work history and authorization. Some companies may even include information from your social media presence.
And although background checks may not include your credit score, they may include a financial history, which can offer a potential employer or landlord a lot of the same information.
What exactly is a financial history?
Although it doesn’t condense the information into a credit score, the modified credit report on a background check does offer the screener a lot of your financial information, such as:
- Loan and repayment history
- Current balances of existing credit accounts
- Bankruptcy filings
- Reports of accounts going into collections
In other words, even though they won’t see your exact credit score, because the screener will see a modified credit report, they will see some of the data that helps determine it. If you have a bad financial track record that includes things like delinquent accounts, late payments and bankruptcies, it could keep you from getting that new job or condo.
What is a credit score, anyway — and why is it significant?
If landlords and employers don’t necessarily need your credit score to reject you, why is it so important?
Credit scores can be the key to obtaining a mortgage, a credit card or an auto or personal loan, and they can help you get better rates on all of them. Insurance companies may also consider your credit score before they issue a quote for coverage. (And, as we mentioned above, landlords do sometimes request credit scores specifically.)
“You save so much money with an excellent credit score,” said Beverly Harzog, a personal finance author and credit card expert for U.S. News and World Report. Those low rates can make it easier to stay on top of your payments — which makes it more likely you’ll maintain a positive credit score.
Exceptions to the rule
Although the vast majority of background checks don’t include your credit score, it’s possible you may run into an exception — for example, if you’re applying for a job in the financial industry or any job where you might handle a lot of money.
But in all cases, you must give written permission for a background check, and the screeners would need to specifically note their intention to pull a credit report. As Harzog put it, “It’s not going to be a sneak attack in the middle of the night.”
This is one more reason it’s so critical to take advantage of your free annual credit report. By keeping an eye on your file, you’ll be able to get ahead of any false or fraudulent information.
What happens if you don’t agree to a background check?
Your permission is required for an employer or landlord to run a background check, and you can always simply refuse to give it.
But if you do, your would-be screener has the right to refuse to give you that job or lease. However, there are laws in place that determine exactly how extensive a background check may be and what information can be included. These laws, which vary by state, are intended to avoid potential discrimination.
How to improve your credit history — and your score
Clearly, your credit history and your score can both have significant impacts on your life. If you want to own a house, buy a car or even just get a new job, you want a positive credit report in your corner.
Fortunately, if your credit isn’t quite where you’d like it to be, there are steps you can take to repair it, though it does take discipline and patience.
Harzog, for instance, got into the world of personal finance journalism after her own journey with credit card debt, wanting to help others avoid the mistakes she made.
Her advice for raising your score and repairing your credit is simple: “You put a budget in place you track your spending, and you pay all of your bills on time.” Whether you take the avalanche method or snowball method, or follow her example and create a debt “blizzard” — paying off the account with the lowest balance first and then taking on the rest in descending order of APR — perseverance and dedication should get you where you’re going.