Employers will now dig into your credit report before offering you a job. Sounds scary? Here’s what you need to do right now.
A great resume may not be enough to land you a great job. If you are a job-seeker on the lookout, make sure to update your Credit Score along with your resume! With more and more employers turning to credit bureaus as part of their candidate-evaluation process, a great interview may not be sufficient to win over a prospective employer.
In addition to the qualifications and degrees, you may need to streamline your existing lines of credit to arrive at a decent Credit Score.
Although checking an employee’s credit history forms a part of a routine background check in most countries today, it has only been recently initiated in India. Employers now reach out to credit bureaus to gather information about a candidate’s credit history before taking a final employment call.
How does it impact your chances of getting hired?
If credit is considered in the hiring process, candidates with low credit scores will naturally fall out of favour. A Low Credit Score can mean a lot of things – it can mean you have not paid your loans or that you are not good at managing financial assets or even the fact that you are not responsible enough to be offered the job.
Will your Credit Score be revealed to your employer?
No, your Credit Score is not shared directly with anybody. What is shared, instead, is a comprehensive credit report. It takes into account any loan default that you may have made, any payments you may have missed, and any regulation that you may have breached.
Employers dig into credit reports to make sure they are not taking anybody on board who has violated laws or has a record of untrustworthiness. In most cases, the employers are only keen to find out if the candidate has enough financial maturity to take on the role which is being offered.
Additional Reading: What Your Credit Report Says About You
How should you deal with a pre-employment credit check?
Check your credit report before your employer does:
If you are completely unfamiliar with Credit Scores and how they impact your overall credit report, it’ll do you a world of good if you can familiarise yourself with it first. Credit Score is a three-digit number that is allotted to you based on your past credit history. For a score calculated within the range of 300-900, a Credit Score of 700 and above is considered to be good.
Check your Credit Score and find out if it is above or below the benchmark level of 700. In case it’s lower than 700, figure out the reason behind it and see what can be done to increase it.
Monitor your Credit Score on a regular basis:
Credit Scores can change depending on the way you are handling your credit. If you have a good Credit Score now and default on a payment in the next couple of days, you will see the numbers stumble and fall. Make sure you are following up on your existing lines of credit every now and then.
If you see an error, report it:
Although it’s uncommon credit reports can be wrong too. If you notice a negative change in your Credit Score even after having cleared your dues on time, report it to the authorities immediately. They will fix it if you have a valid reason to back you up.
Don’t be afraid to explain your situation:
If an employer asks you about your credit history, don’t be hesitant to explain your situation even if you have a credit report that you are not proud of. Explain how that situation occurred and show them how you are working towards clearing your dues. A bad history doesn’t necessarily point towards an unredeemable future.
Not sure where to start?
Take your first step with BankBazaar.
When you check your Experian Credit Score at BankBazaar, you don’t just get a number. You receive a comprehensive credit report supported by analysis and recommendations to help you take the right decision towards improving your credit history. And did we tell you it’s absolutely free? Go right ahead!