So you’ve been on the job hunt for a while now, and you finally got an offer you feel good about taking. Then your new potential employer sends you paperwork asking for your permission to check your credit. You know you can’t say no, since you really want this job, but you’ve been working on credit repair, so you’re not that comfortable with them seeing your credit history in its current state.

You may be left wondering why on Earth would an employer need to know about your credit history? Actually, for some very good reasons. Here is why an employer would want to check your credit.

To determine how fiscally responsible you are

For companies that sell expensive products, or employees who get hired to handle finances, it makes sense that an employer would want to hire someone with a stable financial background. A demonstrated history of handling one’s own finances responsibly leads an employer to believe their assets will also be handled well.

To find out if you’re likely to commit a crime

A credit report with a demonstrated history of late payments and other financial hardship will likely set off alarm bells for a potential employer. Employees who face perpetual financial hardship are often the same employees who steal from their employers. Embezzlement, fraud, and outright theft are things an employer might be wary of when they see a credit report fraught with delinquency.

To determine how organized you are

Organized individuals tend to have a good handle on their finances, rarely, if ever, letting bills go to collection. Additionally, it lets them know you’re timely with your bills, which can lead to being timely with the work your contribute to your company. Overall, it speaks to your level of care when it comes to your responsibilities, which, indeed, trickles over to your work.

What won’t your employer see?

Your employer won’t see everything you would see on your credit report. For example, they will not have access to any information that might violate equal employment regulations, such as marital status and birth year. Your credit score and any account numbers will not be available to them either.

Additionally, since this type of credit check is considered a “soft inquiry,” it won’t have any impact on your credit score, the way a hard inquiry might. Hard inquiries are reserved for opening new lines of credit, and those who conduct a hard inquiry will see everything: account numbers, marital status, date of birth, and, of course, all open accounts and negative items. Employers are generally not able to pull these types of reports, though these regulations vary by state.

Not every employer will want to check your credit. Usually companies who handle large sums of money, such as banks, or anyone who requires a security clearance, such as a government contractor, will require you to submit to a credit check.

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