What’s an Employment Credit Score?

A Hiring Risk Score is a pioneering concept from SmartCredit® that shows how employers may judge you based on your credit report.

Because 50 percent of employers use your credit report to determine hiring, firing, or promotions, it’s essential to create a new score that considers factors they may apply.

As such, our Hiring Risk Score weighs certain factors more or less, depending on how an employer may look at your credit report.  Remember, employers can’t see your credit score.  Characteristics on your credit report are manually reviewed and determined differently for a job or promotion than for a loan or line of credit. To that end, loans and lines of credit are almost exclusively credit score-based.

Your Employment Score Range Is Between 350 and 850:

• Great or Excellent: 775-850
  
• Good or Very Good: 685-774
• Normal or Average: 615-684
• Below Normal or Poor: 516-614
• Bad or Very Bad: 350-514

The Hiring Risk Score draws from many different data points in your credit report. The percentages below reflect how important each category is in determining what’s in it.

• Payment history in the last 12 months (recent financial stress): 40%
• Tax liens and collection accounts: 25%
• Excessive loans (unnecessary financial stress): 15%
• New credit or new credit attempts in last 6 months (sudden change in financial needs): 10%
• Length of credit history: 5%
• Student loan history: 5%
• Total: 100% of your employment score

As you can see, the last 12 months are critical to an employer.  Paying your bills on time, having low financial stress, and avoiding tax liens or collection accounts demonstrates good healthy behavior on your part.  All of which is important to employers who judge your character as part of their screening process.

Compare that to how standard credit scores are calculated, including the FICO credit score:

Payment history                      35%

Total amounts owed               30%

Length of credit history           15%

New credit                              10%

Type of credit in use               10%

Total                                        100% of your credit score

Understanding your Hiring Risk Score can be the difference between getting hired, fired, or promoted.

Be prepared by keeping your credit report the best it should be.  Use SmartCredit’s Hiring Risk Index available to all members at no additional charge. That way, you can see what an employer sees and precisely how they may judge your credit report.

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Use our Action Buttons to fix credit report errors, remove identity theft, get goodwill corrections of negatives and even settle small debts. It works fast and is very effective. My recommendation is first to use the SmartCredit.com Action Button to negotiate your debt directly.

Categorised in: Credit Report, Credit Score, Employment, Improving Credit, Money & Identity

This post was written by David B. Coulter