Employers may check your credit before hiring you. Here's why.

Don’t let that stand in the way of your dream job. Here’s everything you need to know about what companies can see, what rights you have and what options are available to buff up your report.

More: Find your perfect employer at ZipRecruiter

Why do employers check credit?

Employers want to gather as much information about potential hires as possible, and your resume and cover letter usually aren’t enough.

The investigation can be more or less rigorous depending on your industry and level of seniority. If you want to work in finance or government, expect your employer to exhaust every tool available before bringing you on board.

Here are a few reasons employers will request your credit report.

1. You’re be handling money

It’s no surprise that employers want to keep their cash in safe hands.

Hiring managers assume that candidates with the skills to manage their own money successfully could do the same for the company.

At the same time, managers may fear that a worker who’s deep in debt will be more likely to embezzle company funds.

2. You’re making important decisions

Your prospective employer might want to check your credit history even if you’re not handling large amounts of cash.

Missed payments could be taken as a sign that you’re unorganized or irresponsible. If you can’t manage your own household, how are you going to handle big, important decisions at the office?

Expect even greater scrutiny if you want to work for the government or an influential company. An employee who’s desperate for cash may be vulnerable to bribery; managers could fear that outside forces will influence your decisions and ask you to hand over confidential information.

3. To protect against fraud

Stains in your credit history don’t make you a criminal, but employers may want a look at your credit report just to ensure you are who you say you are.

By matching the information on your credit report with the information you provided in your application, employers can be reasonably sure they’re not being hoodwinked.

More: Get your free credit score today

What employers see in a credit check

The modified credit report that potential employers can see will exclude some personal information — notably, anything that could violate equal employment laws. That includes your date of birth, account numbers and details about your spouse.

It will, however, show your name, address, Social Security number and details about your debt, including mortgages, credit cards and student loans.

Employers will be able to see whether you pay your bills on time, how much debt you have, whether your accounts have gone to collections and whether you’ve ever suffered a bankruptcy or foreclosure.

You can tell prospective employers about your fabulous organizational skills all you want, but late payments will tell them a different story.

Do all employers check your credit?

A survey from the Professional Background Screening Association found that 94% of companies conduct some type of background check on a potential employee.

About 38% of employers do credit checks for certain candidates and positions, but only 14% say they run checks on everybody. If your job involves handling money or making big decisions, there’s a much greater chance a company will ask to see your credit history.

Do you have any legal rights?

• Local laws may protect you. Several states ban or limit the use of credit checks for employment purposes, including California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont and Washington. Even some cities have passed laws: New York City and Chicago prohibit employer credit checks.

• You must give consent. Employers can’t simply take a peek at anybody’s credit report; you need to give written permission. Prospective employers also need to tell you in advance that a credit check is part of the application process.

• Bankruptcy shouldn’t count. The point of bankruptcy is to give you a fresh start. By law, potential employers aren’t allowed to discriminate against you because you’ve filed for bankruptcy. However, they can still use any of the other debt and payment information contained within your report.

• You can contest mistakes. If an employer decides not to hire you because of your credit report, it’s required by law to tell you and point you toward the credit bureau that supplied the information. You also have a right to contest any of the information within that report.

Does a company credit check hurt your score?

When you apply for a new loan or credit card, your prospective lender will request your credit history from one of the major credit bureaus.

This is called a “hard inquiry.” It will lower your credit score by several points and typically stay on your report for 24 months.