Ready to say goodbye to student loan debt for good? Learn More
2020 Best Invention

Can an Employer Deny Me a Job Because of My Bad Credit?

4 minute read Upsolve is a nonprofit tool that helps you file bankruptcy for free. Think TurboTax for bankruptcy. Get free education, customer support, and community. Featured in Forbes 4x and funded by institutions like Harvard University so we'll never ask you for a credit card. Explore our free tool

In a Nutshell

In the majority of states, employers can deny you employment if you have bad credit. Some states and cities have passed laws that prohibit the practice, though there are some exceptions, such as for jobs in the financial sector. Employers must get your written consent before they run a credit check as part of the hiring process. Having certain negative items on your credit report may not hurt your chances for all jobs.

Written by Attorney Kassandra Kuehl
Updated May 19, 2022

There aren't many things more stressful than doing a credit check only to discover that your credit score is far lower than you’d like it to be. Good credit is often key to securing loans, housing, and even a job. Though it’s not always obvious why a potential employer would want to run a credit check as part of the hiring process, many employers do examine the credit histories of prospective employees when making hiring decisions.

Since bad credit can keep you from landing the job you want, it’s important to understand how your credit history can impact your job search. If you know what to expect, you can create the strongest possible plan for landing your dream job despite having less than ideal results tied to an employer credit check.

Why Do I Have Bad Credit?

A poor credit score is generally caused by a rocky financial history. As a consumer, you don't have a credit score until you start building a credit history. If you pay your credit card bills, mortgages, medical bills, student loans, and other accounts on time, your score will go up. But several things can make your score drop, including:

  • Not paying credit cards and other debt

  • Making late payments

  • Having accounts sent to collection agencies

  • Have a judgment levied against you

If you don't know what your credit history looks like, you can pull a free credit report from each of the three major credit bureaus on It's good to review your reports from Equifax, TransUnion, and Experian before you begin a job search and check each report for errors.

Even if you aren’t actively job hunting, it's good to pull your credit reports annually to make sure that your credit scores aren’t being negatively impacted by misinformation submitted to any of the major credit bureaus.

Upsolve User Experiences

2,093+ Members Online
Vanessa Garcia
Vanessa Garcia
★★★★★ 1 day ago
Life saving experience at this time of my life
Read more Google reviews ⇾
Deveraux's Gourmet Coffee Personnel
Deverauxs Gourmet Coffee Personnel
★★★★★ 1 day ago
This app was awesome and helped me achieve a short term goal of filing my bankruptcy before the end of 2023. I'd most definitely recommend for anyone who wants to file bankruptcy but doesn't want to pay a bankruptcy lawyer almost $2000 that they really can't afford.
Read more Google reviews ⇾
Shari Hogg
Shari Hogg
★★★★★ 3 days ago
What a great resource to have!! I had no problems using upsolve. They walk you through everything. Extremely user friendly
Read more Google reviews ⇾

Job Application and Credit Reports

Some prospective employers conduct criminal and financial background checks on the most promising candidates for a position. They may be required to take this step for legal or licensing reasons.

For example, some jobs require workers to access sensitive information or have a security clearance. These employers need to know that their new hires don’t have a history of criminal behavior related to their job responsibilities.

Similarly, some employers use employee credit checks to better evaluate the risks of hiring specific job seekers. For example, if you’re drowning in debt and you’re asking for a job managing client finances, the employer may want to ask you some questions about why you’re qualified to give financial advice when you’re struggling with your own financial situation.

Are Prospective Employers Permitted To Deny You a Job Based on a Credit Report?

Employers may be able to legally deny you employment based on the results of a credit check. This depends on where you live, the employer, and the nature of the job position.

Federal Jobs

Federal jobs are fairly straightforward. The federal government isn't generally permitted to deny employment based on the results of a credit check under federal law. That said, if the job you’re applying for requires a security clearance, you may not be eligible for that position if your credit history prevents you from securing it. That's why it's important to make sure that you fully understand the requirements of any job you apply for with the federal government before you invest time and energy applying to a job for which you might not be eligible.

Private Employers

The laws around hiring practices for private employers are more nuanced. Each state has its own laws addressing the use of credit information for employment purposes. Some states and major cities have enacted legislation that protects applicants from having their credit histories used against them in hiring and other employment practices. But the majority of states allow private employers to use poor credit history as a lawful reason to reject a job seeker’s application.

If an employer conducts a credit check as part of the hiring process, they're required by law to tell you that they plan to review your credit. Before the employer can pull your credit history, you must provide consent. Note that credit scores aren't usually included in background checks, but a detailed credit history from the past several years may be included.

Not all employers go through this time-intensive process, but some will if they’re looking for specific red flags. These employers may have concerns about the risk of potential fraud, the need for a security clearance or licensing eligibility, or evidence that the applicant may be vulnerable to bribery.

States That Prohibit Employment Discrimination Based on Bad Credit 

Although the federal Fair Credit Reporting Act doesn’t prohibit the use of employer credit checks during the hiring process, more than 10 states and several cities have passed regulations that restrict an employer's ability to utilize credit information when making employment decisions. These jurisdictions include:

  • California

  • Chicago

  • Colorado

  • Connecticut

  • Delaware

  • District of Columbia

  • Hawaii

  • Illinois

  • Maryland

  • Nevada

  • New York City

  • Oregon

  • Philadelphia

  • Vermont

  • Washington

Will Bankruptcy Prevent Me From Getting a Job?

When you file for Chapter 7 or Chapter 13 bankruptcy, it's recorded on your credit report. It will also temporarily impact your credit score. But just because you filed for bankruptcy doesn't mean you won't be able to get a job.

Sometimes, filing for bankruptcy reflects positively on you as an applicant. For example, if you're applying for a job that requires a security clearance, a bankruptcy filing illustrates that you've proactively dealt with your debt and may therefore be more difficult to bribe. In other scenarios, employers will generally treat a bankruptcy filing like they treat any other negative credit information.

Both protections against discrimination and lawful consideration of credit information in employment decisions apply to bankruptcy in the same way that they apply to outstanding credit card debt, a bad overall credit score, and any other red flags on an applicant’s credit report.

Let's Summarize...

Before you begin hunting for a new job, take time to thoroughly review your credit reports from all three major credit bureaus. Being proactive helps ensure that any misinformation on your reports won’t impact your job search. If your credit history looks accurate but you’re worried that information revealed by a credit check could hurt your chances of securing employment, make sure to research any protections that your state or major city affords you. Your state or city may prohibit hiring discrimination based on credit history, which will give you one less thing to worry about.

If you’re not protected from this kind of discrimination, keep in mind that a potential employer may be conducting a credit check only to evaluate targeted negative information. As a result, bad credit may not prevent you from landing your dream job even if your prospective employer checks your credit.

Written By:

Attorney Kassandra Kuehl


Kassandra is a writer and attorney with a passion for consumer financial education. Outside of consumer law, she is focused on pro bono work in the fields of International Human Rights Law, Constitutional and Human Rights Law, Gender and the Law. Kassandra graduated from Universi... read more about Attorney Kassandra Kuehl

It's easy to get help

Choose one of the options below to get assistance with your bankruptcy:

Free Web App

Take our screener to see if Upsolve is right for you.

Take Screener
12,695 families have filed with Upsolve! ☆

Private Attorney

Get a free bankruptcy evaluation from an independent law firm.

Find Attorney

Learning Center

Research and understand your options with our articles and guides.

Go to Learning Center →

Already an Upsolve user?

Read Support Articles →

Upsolve is a 501(c)(3) nonprofit that started in 2016. Our mission is to help low-income families who cannot afford lawyers file bankruptcy for free, using an online web app. Our team includes lawyers, engineers, and judges. We have world-class funders that include the U.S. government, former Google CEO Eric Schmidt, and leading foundations. It's one of the greatest civil rights injustices of our time that low-income families can't access their basic rights when they can't afford to pay for help. Combining direct services and advocacy, we're fighting this injustice.

To learn more, read why we started Upsolve in 2016, our reviews from past users, and our press coverage from places like the New York Times and Wall Street Journal.