Does Your Job Influence Your Credit Score?

The easy answer to this question is no, your job does not directly influence your credit score. The complete answer to that question may be more complex, however.

For example, in Canada, a person looking for an automobile loan may find that (s)he is evaluated on a variety of factors, including the duration of their current job and the salary they collect.

Salary is definitely also a factor in the U.S. when a credit agency is evaluating whether or not to grant a loan to an individual. All businesses who provide loans examine the debt percentage – how much a person owes compared with how much that person brings to the table in terms of income.

But credit reporting agencies who develop the FICO and other credit scores do not consider salary in their numerical calculations.

In fact, an objection that many have to the credit score is that it is so impersonal, and does not take into account any personal factors, such as an illness in yourself or close family member or the economic conditions in the area where you live.

On the other hand, they are also not allowed (and don’t) to take into consideration any information regarding race, gender, religion, nationality, marital status, age, hometown, interest rates charged, salary, occupation, job title, length of employment or employment history.

Many people consider this good news, since there are often gaps in employment history or decreases in salary over the course of a career, but those who manage to keep their finances in good order through those kinds of challenges are able to maintain credit scores just as high as those who never had such problems.

A credit score may, however, but used when you are looking for a job. Potential employers have begun to use credit scores to determine the relative responsibility of potential hires. It is possible that your potential employer will know about any debt you have, bankruptcy, or poor credit history.

A person who has been responsible in his or her finances is considered a better risk as an employee; since they make the assumption that such a person will also be responsible with the company assets.

While some consider it a difficult thing that landlords, employers and insurance companies may all run credit reports on you before determining your rates or deciding to rent to you, it is true that every business is attempting to lower its risk factors in any way possible, and hiring, renting to, and insuring good credit risks helps lower business risk.