If an employment credit report plays any part in a decision that negatively affects you, federal law requires the company to give you a copy of the report along with a description of your rights. (istock)

Your credit history affects so much of your financial life.

The information in your credit file — how you pay your debt — can affect your ability to get the best interest rate on a loan. It can be used to generate an insurance credit score that along with other information — your driving record, claims history — can determine what you pay for auto or home insurance. It matters when renting a place to live.

And you’ve probably heard or read that a bad credit history might cost you a job.

But on this last point, some clarification is needed.

For a series of columns on myths about credit scoring, I’ve asked representatives from the three major credit bureaus — Equifax, Experian, TransUnion — and FICO, the company that created the credit-scoring model used by most lenders, to address some common misconceptions. In this installment, they clear up the fear many people have that a low credit score can keep them from being hired.

In order to view your credit history, employers first have to get permission. If you grant them access, they get a dressed-down version of the record that lenders typically see. And most importantly, the report does not include your credit score.

So it’s your history — not your score — that could play into getting a job.

The files the credit bureaus keep on you contain a record of how you’ve handled your debts and bill payments. This information is used to generate credit scores, which are used to measure how much of a financial risk you may be.

Concern about the use of people’s credit history ramped up following the release of a 2012 report by the Society for Human Resource Management. It stated correctly that, in some hiring decisions, employers were taking people’s credit report into account. But “credit report” and “credit score” are often interchanged, and thus the myth or misunderstanding proliferated. (I’ve even slipped up by failing to clarify the difference.)

So to be clear, an employer does not get your credit score along with your credit report.

“Credit scores are not used for employment-screening purposes,” said Can Arkali, principal scientist for FICO.

The report found that the top two reasons employers want to see a credit report is to prevent theft and to reduce legal liability for negligent hiring. Employers also pull the history to comply with state laws requiring a background check for certain positions. I’ve helped people improve their credit profile so that they don’t lose their security clearance. (FYI: The top ways to improve your score are to pay your bills on time and reduce your debt.)

“The report gives [employers] insight into your personal money-management habits and overall financial well-being, which helps them manage risk to the company,” said Rod Griffin, director of public education for Experian.

Griffin also pointed out that employers do a credit background check for identity verification. “Doing so protects the business from employment fraud and potentially the public from harm,” he said. “For example, a chemical factory may use the report to verify the identity of applicants to ensure they aren’t falsifying information so that they could access dangerous chemicals that could be used to harm people.”

By the way, if the employment credit report plays any part in a decision that negatively affects you, federal law requires the company to give you a copy of the report along with a written description of your rights.

Additionally, the credit file that employers get is meant to help prevent discrimination. Employers receive a limited version of a credit report that excludes any information that would violate Equal Employment Opportunity Act regulations, Griffin said.

A spokesman from Equifax said the version of a credit report that an employer sees does not show a person’s age, date of birth or account numbers.

Experian’s employer report withholds information that is irrelevant to hiring decisions, Griffin said. It does include a person’s Social Security, driver’s license and phone numbers for verification, as well as length of time at current and previous addresses, employment information and other names used, such as maiden names and aliases. It also has public-record information on bankruptcies, liens and judgments.

Even if you have a bad credit history, an overwhelming majority of employers said they allow candidates to explain their financial situation before a hiring decision is made, according to the report.

And here’s something that may assuage your concern about a poor credit background: Eighty percent of employers said they have hired job candidates despite the presence of negative credit information in their files.

So, once again, the facts should help allay your fears.

Write Singletary at The Washington Post, 1301 K St. NW, Washington, D.C. 20071 or michelle.singletary@washpost.com. To read more, go to http://wapo.st/michelle-singletary.