According to MSN Money, more than one-third of employers check applicants' credit reports before hiring them. A credit check involves the potential employer pulling the credit report of the potential applicant, similar to the way a lender would check your credit score.

Features

When a potential employer checks your credit, she gets to see how you have handled your debt obligations in the past as well as your identifying information, such as your address, social security number and employment history. She does not get to see your credit score or your birthday on the credit report.

Purpose

Especially in jobs requiring you to handle money or sensitive information, employers want to know that you are not in serious debt, which might compromise your integrity on the job. Employers also want to see how a person handles her debt to get an idea of how she might handle on-the-job responsibilities and obligations.

Effects

If an employer decides not to hire you because of something listed in your credit report, he must let you know what negative information affected his decision so you can challenge the credit bureau's records if the information is errant.

Considerations

Potential employers must have your consent before running a credit check. However, if you decline permission, you may not be seriously considered for the position.

Misconceptions

Your credit score will not be negatively affected by having a potential employer pull your credit report like it would if a lender considering you for a loan pulled your credit score.

Source:

Privacy Rights: Employment Background Checks

MSN Money: How Bad Credit Can Cost You a Job

MSN Money: 5 People Who Check Your Credit