We all know that a good credit score is instrumental to getting a decent deal on a mortgage. But did you know that a bad score could keep you from landing a job?

Employers don’t want to hire applicants who have problems in other parts of their lives, and that includes debt. It’s more than just wanting workers to keep their minds on their jobs, too. Employees with heavy loads of debt are much likelier to harm a company — think embezzlement, corporate espionage or misuse of company funds. What employer wouldn’t want to prevent those sorts of things from happening to their businesses?

During the application process for a new job, your potential employer might ask you to sign a form giving them permission to run a check on your credit. The credit agency won’t give them a full copy of your report, but they’ll handover the grand majority of your information. Legally, credit reporting agencies cannot provide an employer with the following:

• your marital status
• your year of birth
• your account numbers

Most employers are simply looking for two things: warning signs that you might be a financial risk and a general sense of your responsibility. If you are submitting applications, your best bet is to have good credit. But many of us have a few slip-ups here and there on our records. For the average job applicant, it can be hard to tell just what might cause a problem with an employer.

There may not be too much for you to worry about, though. Most hiring managers are not going to pounce on every little mistake. There are also a few steps you can take to rebuild your credit.

• Consider paying your monthly payments in full and on time a priority — even if you’re unemployed.
• If you can’t make your payments, contact your creditors and establish some sort of payment plan before you become delinquent.
• Avoid opening new accounts or applying for new credit just before starting your job hunt.
• Reduce your debt (the money you owe) to credit (the money lenders will give you) ratio.

If you’re still uncomfortable with your credit report, you can refuse to grant permission for prospective employers to look at it. Before you make that decision, though, you should be aware that many employers will remove your name from consideration immediately. They’ll assume that you have something to hide. A better approach — although not without risks — is to grant permission but ask the hiring manager to discuss your credit report with you before making a decision. Assuming your interviewer agrees, you’ll have a chance to point out extenuating circumstances and argue your case.

If you’re planning a career in banking, security, finance, public service and other sensitive fields, your credit report can be crucial. It’s worth making the effort now to improve your credit and build a history that you wouldn’t mind your employer looking over.

Popularity: 14% [?]

When you’re looking at your credit report, depending on which of the three companies provided it to you, you may see your FICO score — a number between 300 and 850. But it can be difficult to understand just how that number corresponds to your credit score.

Your FICO score, or credit score, is based on the information in your credit report. It’s a sort of analysis of your payment history, ability to pay off credit and comparison to how other people have done in similar situations, all rolled into one little number. And that one little number can mean a big difference if you’re looking for a mortgage or other credit.

The problem that you may run into with a low FICO score is that FICO scores are all about making lenders’ lives easier. No matter whether you had some sort of extenuating circumstance that led to a low FICO score, you won’t even have the option of explaining it away to a lender. Instead, it’s up to you to raise your FICO score.

Unlike credit reports, which can show past mistakes, FICO scores can be relatively easy to repair. While you can’t raise your score overnight, you can bring it up. And when a lender looks at a FICO score, rather than your credit history, they don’t see how long your FICO has been at a certain level. In a way, FICO scores can even the playing field.

To improve your FICO score, you will need to take some steps to generally improve your credit:

• Make paying your bills in full and on time your priority. Late payments and outstanding bills significantly drag down FICO scores.
• Pay off credit cards — but don’t close your cards after you’ve paid them off. A high ratio of credit available to credit used can raise your FICO score.
• Give it time. You’ll need positive credit history to bring up your score, which is one of the reasons it’s hard for young people to get high FICOs.
• Don’t apply for any new credit. Sure, you’ll need to apply for that mortgage you’re aiming for, but limit your other credit: no new cards or accounts. The folks figuring FICO scores assume that if you’re looking for a lot of credit at one time, you’re in some sort of financial difficulty.

Lastly, building up a respectable FICO score can take some time. If you’re planning some big purchases in the future — like a home, start now! It may take a year to get your credit to the level you’ll need to get a decent mortgage. And once you’ve got your FICO up, make the commitment to keep it up. Keep up on your bills and financial commitments to keep away worries about FICO scores and credit reports.

Popularity: 18% [?]

No matter what your financial situation is — whether you’re getting ready to purchase a home or you’re working on getting out of debt — you should have a good idea of what’s on your credit report. Because your credit report is the key factor for lenders trying to decide just how much credit they’ll extend to you for mortgages, credit cards or car loans,not knowing your credit report can set you up for a nasty surprise.

As long as you live in the U.S., you are entitled to a free copy of your credit report every year from each of the three main reporting agencies (TransUnion, Equifax and Experian). And to make the process easy, all three reports are available through the same website: AnnualCreditReport.com. You can also obtain your credit report through a toll-free number or a mailing address available on the site. AnnualCreditReport.com is the only site that is actually required to give you a free copy of your credit report: there are hundreds of other websites available online that offer to do the same thing, but most of them are effectively scams — they require you to sign up for other services to get a free credit report or use other techniques to get money from you.

To receive a credit report from AnnualCreditReport.com, you’ll need to provide some personal information (including your Social Security number) and answer a series of questions about your past credit, such as what car you owned at a given time, in order to prove that you are, in fact, you. This system is intended to protect your credit information. If you can’t answer all credit questions correctly — and don’t worry if you can’t; I couldn’t and there wasn’t anything wrong with my credit — you’ll be asked to provide some further information via mail.

I don’t recommend getting all three credit reports at once — instead, you can, in a way, game the system. I get a credit report every four months: TransUnion in January, Experian in May and Equifax in September. This way, I have a good idea of what’s happening with my credit year round. Not all of my credit activity shows up on all three reports because some lenders report to only one or two, but I still have a general picture.

When you receive your credit report, you should check it over and make sure that you recognize each item on the report. If you find an item that you need to dispute, you will need to contact the credit reporting agency to both file a dispute and to request a fraud alert to be placed on your file, if you feel that you may have been a victim of identity theft.

Popularity: 22% [?]