Many companies today, from small to large multinationals, perform credit checks as part of their background check process in order to determine the eligibility of potential candidates. It’s no secret that some companies even tend to ask their employees to provide their credit reports in order to determine whether or not they are suitable for a promotion.
Credit checks can positively or adversely impact your chances of getting hired for an open position. They allow the employer to better understand your money spending habits. So if you have bad credit in your report, and are currently employed, this article will help you understand whether or not your job is in jeopardy.
Remember that your credit report can only be seen by your employer or potential employer when you grant them permission. If you are currently employed, your employer may ask for your credit report for various reasons. If you want to get your free credit report, you can visit Experian or any other major credit reference agency’s website.
Your credit report may impact your job status when:
- You are applying for a new job
- You are in line for promotion
- Your employer is conducting routine credit checks of existing employees.
Your credit report with entail details of any credit accounts, loans, mortgage, delinquencies, liens, judgments, and bankruptcies of the last six years. It also includes record of your repayments which affect your credit score. So if you purchased clothing worth £1,000 using your credit card, it will appear on the credit report for your employer to see.
Impact on Job Status
How your credit report impacts your current job status will depend on several factors. For instance, if you want to take out a loan from your employer, then a credit check will enable them to better understand your ability to repay the loan.
This is important because some individuals may have good monthly income but may be in debt and have high monthly expenses. As a result, they may find it difficult to keep up with their existing debts and expenses.
Consider a different situation. You are being considered for a managerial role in the finance department. Now when the employer conducts the credit check, they will look for a positive credit score and good track record of repayments on debts (if any).
Now if you have a poor track record of managing your personal finances, then your employer may not consider you for promotion. So basically, the credit check has limited your growth potential. Also, it goes without saying that having a bad credit score and a career in finance will make it difficult for you to find employment, let alone seek growth opportunities.
Credit checks are generally conducted by large employers, as smaller companies do not have such strict requirements for candidacy. Regardless of where you work, if your credit score is improving as you gain financial stability; it will positively impact your employment.