There are many things employers cannot ask for under equal employment opportunity laws, but your personal credit history is not one of them. Many employers, including some security companies, banks and municipalities request applicants to sign a waiver authorizing them to do background checks, which sometimes includes pulling a credit report either to initially obtain a job or when applying for a promotion. Employers do this for various reasons. They could be checking to see if your debt load is too high for the salary they are offering. For sensitive positions in security, banking or government jobs, they may be trying to see how trustworthy and reliable you may be. It is very important that your credit report is accurate, not only for the purpose of obtaining additional credit at good rates, but for your job security as well.

The Federal Trade Commission (FTC) recommends that you pull a credit history on yourself at least once every year to ensure that you are receiving the 'credit' that you deserve. Employers, or prospective employers have to give you notice in writing that a credit report may be pulled. They also need your consent before pulling your credit history from a Credit Reporting Agency (CRA). Once you are hired, your employer may continue to pull credit reports at various intervals during employment as long as they have given you a 'separate document notice' indicating that reports will be pulled in the future.

However, they should not pull unnecessary reports, as too many inquiries will negatively affect your credit rating. Many financial advisors will tell their clients to periodically pull their credit histories to check who has made inquiries and why. In 1997, two important amendments were added to the Fair Credit Reporting Act (FCRA). The first amendment ensures that individuals are aware that consumer reports may be used for employment purposes and agree to such use. The second amendment ensures that individuals are notified promptly if information in a consumer report may result in a negative employment decision. If employers rely on a credit report to take adverse action, that is denying a job application, denying an employee a promotion or reassigning or terminating employment, they must follow certain rules according to the FCRA.

First, they must give you a pre-adverse action disclosure that includes a copy of your credit report and a copy of 'A summary of your rights under the FCRA.' After the employer has taken the adverse action, they must give you notice orally, in writing or electronically that the action has been taken in an adverse action notice. This notice must include: ·The name address, and phone number of the CRA that supplied the report ·A statement that the CRA that supplied the report did not make the decision to take the adverse action and cannot give specific reasons for it and ·A notice of the individual's right to dispute the accuracy or completeness of any information the agency furnished, and his or her right to an additional free report from the agency upon request within 60 days.

Pam Spruk has worked in the banking credit and collections industry most of her adult life. Working in the industry, she knows how important having a good credit rating can be. She also knows from experience that employers often pull credit histories. "My last two employers have pulled credit reports upon being hired," she said. "I understand the importance of it, but sometimes things on your credit report doesn't necessarily reflect the person that you are."

Mrs. Spruk had the unfortunate experience of having her ex-husband's credit affect her negatively. Although she has never been denied a job or promotion because of her credit history, she says it is a little unsettling to have his bad judgement reflect on her. In most states, once you are married, your financial histories merge as well. It is a good idea to know how your spouse's history has affected your credit rating, especially before you apply for employment.