Is there a financial skeleton in your closet? Unfortunately, it’s not something you can hide.
In fact, the credit reference agencies probably already know about it and that means it’s logged on your credit report. And it’s not just lenders that can get access to your credit report… employers and recruitment agencies can too (with your consent, of course).
What do my finances have to do with a job?
When an employer or recruitment agency credit checks you, they’re looking for signs of poor financial management. This could form part of their pre-employment screening process – and if they see any ‘red flags’, it could be an easy way for them to minimise the amount of CVs on their desk.
Checking someone’s credit report is thought to be a quick way of assessing how reliable, responsible and organised a person is. Now, it isn’t really fair to take someone’s personal life as a representation of their capabilities within work – but when it comes to hiring someone new, a recruiter/employer wants as much peace of mind as possible.
Credit checks are more common in certain industries
Credit checks can happen in any business sector, but some are legally required to perform checks on prospect employees. These can include companies within the financial, legal and insurance industries. They are required to do this because there is a business risk associated with hiring someone for a financial-related role when that person has bad credit themselves.
So, what information do they have access to?
The good news is that your prospective employer won’t be able to see details of any credit agreements you have. The bad news is that they will be able to see any serious financial mistakes you have on your credit report from the last 6 years, such as:
- IVAs (Individual Voluntary Arrangement)
- CCJs (County Court Judgements)
- Or if you’ve been declared bankrupt
Remember, recruiters and employers can only access your credit report if you give them permission. You have every right to deny their request… but this could affect their decision on whether to give you the job or not.
Be prepared for a credit check
The best thing you can do is to be prepared for a credit check request. We strongly recommend you check your credit report to see if there are any mistakes before applying for a job.
If you have a clean sheet, you can be confident that you have nothing to worry about if they ask you for a credit check.
If there are mistakes, you can deal with them straightaway which could improve your credit score and help you to avoid any awkward questions. All you need to do is dispute the mistake with the credit reference agency and they should deal with the situation for you.
Lastly, if there are financial ‘red flags’ on your credit report but they are correct, you can’t really do anything about them but at least you know what questions could come your way. That way you can think carefully about your answer rather than being put on the spot.
Have more time to spare? Find out how to give your credit score a boost.
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