Do Nannies Need Credit History?

Credit history for nannies and other household employees is very important if they are ever planning to apply for a loan, buy a car, buy a house, or have a credit card. A nanny who accepts wages “under the table” will not have a legal employment history or credit history and therefore will not be eligible for any of these things.

A credit score is a number calculated to summarize an individual’s financial reliability. It is used to determine whether a person will be a good risk for credit cards, auto loans, and mortgages. Information about bill payment history, the number of accounts they have, if they pay their bills on time, and any outstanding debt is all available in a credit report. This report is then used to calculate a consumer’s credit score. It is important that a nanny’s credit report is accurate and up to date when they are applying for a loan or mortgage.  If a credit score is unavailable or very low, a lender may not grant the person credit.

Other types of businesses including auto and homeowners insurance and phone companies choose whether to issue a policy or provide a service based on an individual’s credit score. A higher credit score is interpreted as a person of less risk to a company which means they are more likely to be issued insurance and sometimes may pay less for it.

Federal law gives nannies the right to request a free copy of their credit reports from each of the three national credit reporting companies once every 12 months. The Fair Credit Reporting Act (FCRA) also gives them the right to get your credit score from the national credit reporting companies. They are allowed to charge a reasonable fee for the score. When you buy your score, you often get information on how you can improve it.

Request a free copy of your credit report here: annualcreditreport.com

After you pull your credit report, learn how to understand it.